Resumen de Flexible Exchange Rate Regime and Forex Interventions: The Chilean Case

José de Gregorio Rebeco, Andrea Tokman

• This paper reviews the recent experience with a flexible exchange rate regime and forex interventions in Chile. It discusses the state of the economy and the policy implications that arise in the new regime; in particular, the reaction of the authorities to unexpected movements in the exchange rate, through monetary policy and sterilized interventions. The low risks associated to financial and price instability, prevailing in Chile, justify limiting policy reaction to exceptional circumstances in the exchange rate market.