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Colombia, Chile and Peru move to integrate foreign exchange markets

by internationalbanker

By  Alexander Jones

Colombia, Chile and Peru have agreed to combine their stock markets into the Latinamerican Integrated Markets (MILA). The move comes to expedite the money exchange operations of the three partners. Participating partners are the Electronic Bourse of Chile, the Colombia Stock Exchange, the Stock Exchange of Lima, Colombia’s Set ICAP EX and Datapec from Peru.

Alejandro Rubio, the head of Datatec explained that the partnership will complement MILA as it will assist the administration mitigate the risks of foreign exchange whilst cutting cost barriers. The partners will continue to operate in an independent manner at a domestic level.

The head of Colombia’s Stock Exchange, Juan Pablo Cordoba believes that the integration will prove advantageous to participants as well as enhancing the development of the MILA. Chile, Peru and Colombia recorded an average of 4.238 operations daily which involved 128 intermediaries within the financial sector, according to information received from the three markets. Mexico has joined the three countries to form the Alliance of the Pacific. This alliance has an aggressive attitude in the promotion of foreign investment, the private sector and the free markets.

All three partners currencies have seen declines against the dollar in 2013, with fifty two week lows recorded. Chile started the year at 478 with a 52 week low (USD-CLP) in August of 519, as at the 3rd October 500, down 4.6% year to date. In Colombia the peso started at 1,1750 (USD-COP) with a 52 week low in September of 1,958 and 1,887 as at 3rd October down 7.8% year to date. Peru began the year at 2,54 (USD-PEN) and had a 52 week low in August at 2.82 and 2.77 on 3rd October, down 9.1% year to date.

MILA has been successful with growth of 21.3% since the beginning of the year, reaching a capitalisation of $727B in April. The new market is the 2nd largest in Latin America and the Caribbean. It is also the largest market by number listed companies.

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