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CLP - Chilean Peso

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History

Chile is a South American country that was discovered by the Spaniards when the new world was found in the mid 16th century. In the initial years of its existence, the Spanish currency unit that was Spanish escudo at that time prevailed in the country. Peso at that time, along with reales, served as a subunit to escudo according to Spanish monetary system. The country was in governance of Viceroyalty of Peru during this period and the responsibility of supply of currency was in private hands. In some time, in 1749 to be specific, the coins started to get officially minted in Santiago, the denomination being in escudo only. From the year 1817 on, independent coins were issued the Republicans took over the control of the mint and the phase of independent coins began. The country boosted up its currency supply and also started issuing Argentinean 4 and 8 reales coins.

Chilean peso, as a main currency unit, was introduced in 1817 @ 1 peso = 8 Spanish colonial reales and it circulated with escudos and reales. A year later the country declared independence but it wasn’t recognised as an independent state until 1844. Peso was made the national currency of Chile in 1851 and was also decimalised, centavo being made the subunit of the peso dividing it in 100 equal parts. In 1925, the current central bank in operation, Banco Central de Chile, was formed and took over the function of managing the currency from the government. "Condor" that was equal to 10 pesos in value was also used as a denomination in which the currency was issued. The value of the currency was based on gold peg but in 1932, the gold standard was dropped. The country faced consistent inflationary pressure during whole of the 20th century and that is why, it had to resort to large number currency restrictions making it difficult to have access on foreign exchange.

Chile switched over to escudo as its national currency once again in 1960 that was issued @ 1 escudo = 1000 pesos or 100 condors. The reason for this change over was that the value of peso had fallen drastically over a period of time. The currency lasted for about 15 years before it got re-replaced with new peso in 1975 @ 1 peso = 1000 escudos that is still in circulation.

Chilean peso has a currency system based on both coinage and paper currency having equal importance. Due to high inflation, the use of the subunit of the currency i.e. centavo has been subsided and it is no more into circulation. The smaller values in the currency, as in most of the currencies, are denominated using coinage and the higher values are circulated using paper currency. Banco Central de Chile, the reserve bank has been serving the country since 1925 and it performs functions of issuing currency and ensuring circulation of money in country. The official mint of the country, Casa de Moneda, mints the currency coins. The coinage in the currency is issued in 6 denominations ranging from 1 peso to 500 pesos including 1 peso, 5, 10, 50, 100 and 500 pesos. Except the new 100-peso coin, which has an image of a Mapuche woman on the obverse, all the coins show their value on the obverse sides with the year of minting. Also the value depicted on all the coins is surrounded by laurel wreath.

The reverse sides of the coins ranging from 1 peso to 50-peso have an effigy of Bernardo O’Higgins and words "Republica de Chile" engraved around it. The reverse side of old 100-peso coin show the coat of arms of the country and the reverse side of the new 100-peso coin possess the coat of arms with the face value of the coin. The 500 peso coin is bimetallic like the new 100 peso coin and the reverse side of the coin depicts the engraved portrait image of Cardinal Raúl Silva Henríquez. The 1 and 5 peso coins are octagonal, 50 peso coin is 10 sided and the rest other coins are circular in shape.

The banknotes in Chilean peso are issued in 6 denominations that are 500, 1000, 2000, 5000, 10000 and 20000 pesos. Also, the denomination 1000 peso is also circulated in the form of polymer banknote along with the paper form. The obverse sides of the notes show portrait images of important people in the history of Chile and the reverse sides of the notes depict different symbolic images. Also, separate sets of colours have been used for each note so as to make differentiation between them easier. The lowest value holding a Chilean peso note i.e. 500 peso has several shades of brown, black, green, violet and ochre colours on it. Similarly, several shades of green, ochre, red, brown and blue colours are used to print the 1000 pesos note, shades of blue, violet, carmine, ochre, and orange colours are used for 2000 pesos banknote and red, ochre, brown and green colours are used to print 5000 pesos banknote. The 10000 pesos note in the currency has colours blue, green, ochre, reddish brown and violet on its front and backsides and the highest valued banknote i.e. the 20000 pesos banknote is in green, blue, reddish brown, ochre and orange colours. Following are the details regarding the images on the obverse and reverse sides of the notes.

Currency Profile

Chilean peso serves as the national currency for the Republic of Chile, a South American country with other peso using neighboring countries like Argentina, Colombia and Uruguay. The other countries that have been using peso as their currency unit are Dominican Republic, Mexico, Cuba and Philippines. Chile has been using this currency unit since 1851 but the current circulating new peso was made the official currency in 1975 when it replaced Chilean escudo. It is depicted with the dollar sign - "$" and according to ISO 4217 regulation, the currency code for Chilean peso is CLP and the numeric code is 152.

Chile has got one of the most dynamic market oriented economy though now it is facing gradual fall and sluggishness. In the early 90s, Chile was one the most rapidly growing economies of the world and was considered as an idol in context of economic reforms. The foreign trade plays a vital factor in accelerating the growth, especially in case of Chile, and during that time country’s foreign trade was also on boom. Chile is one of the top exporters of copper and the value of currency is also dependent on the metal.

But various situations that had an hazardous effect on the economy brought a total turnaround for the situation of the economy during the late 90s. The value of the official currency of Chile that was going strong until now started depreciating gradually and its only now that it has shown some signs of recovery. The factors mostly external shocks like Asian economic crisis, the breakdown of the Argentinean economy, the drastic fall of the world commodity markets and as a result depreciation in the value of copper, Uruguayan currency collapse and the deterioration in the value of Brazilian real affected the value of peso adversely. Though the economy was strong enough to take this huge amount of pressure on it and that is why it did not collapse straight away abruptly but the effect was slow and gradual. The economy is currently trying to recover from the aftermaths of all these events.

In popular culture, the Chilean people call the currency banknotes and coins with informal names such as the thousand peso banknote is called "luka" in Chilean Spanish. Likewise, "quina" is the name given to 500 peso coin and "gamba" for the 100 peso coin. In context of the currency restrictions, the import and export of all the currencies is free may it be local or foreign currency.

The World Bank classifies Chile as an upper income economy. Chile’s economy is prosperous and stable. The GDP is rated the highest in Latin America. The main industries are textile, cement, fish processing, minerals, copper, wood, foodstuffs, and transportation equipment. Export products are wine, crude oil, copper, pulp and paper, fish products, and copper. Import products are telecommunications, electrical goods, vehicles, chemicals, and natural gas. Chile produces salmon and is rated the 2nd largest producer in the world. Agriculture and mining account for 22.5% of the GDP. The main source of income for Chile is the service industry, which accounts for 54% of the GDP. Agricultural products for Chile are apples, onions, corn, wheat, oats, fish, timber, asparagus, garlic, and beef. It is said that by 2012 the agricultural exports of Chile will be 74% duty-free.

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