Description

This paper presents a comparative analysis of the Chilean foreign exchange market in the period 1998-2008, using the following economic blocks: advanced, emerging and Latin American countries. We study issues such as depth, liquidity and international integration in both the spot and the derivatives markets. We note that Chilean spot and derivatives markets show more favorable depth and liquidity measures than those exhibited by emerging and Latin American countries. In addition, although the Chilean overseas transactions have increased over the recent years, they still remain under the levels shown by the mentioned economic blocks.

We also show stylized facts of the Chilean foreign exchange market in the last decade, by reporting relevant statistics for a better understanding on how this market operates and the main participants’ evolution, according to the economic sector, and by distinguishing between import and export enterprises. We find an increase in the number of participants in the foreign exchange market, mainly in the derivatives market.