Chile is a South American country located between the Andes and the Pacific Ocean. The country has an annual GDP growth rate of 3.1% making it a high-income economy as ranked by the World Bank. Chile is also listed as the most prosperous and most stable nation in Latin America. Corruption rates are significantly low, and in 2006, this country was leading on GDP per capita in Latin America. The currency of Chile is the Chilean peso, and it is represented by the letter “S.” One dollar is equivalent to 681.60 Chilean pesos.
History of the Currency of Chile
The first peso to be used in Chile was introduced in 1817, and its value was equated to 8 Spanish colonial reales. The Spanish colonial real was the currency being used by the Philippines and Spanish colonies in the United States. This first Chilean peso was subdivided into eight reales until 1851. Throughout this year, one peso was equated to 5 French francs. The peso was made the official currency of Chile in this year. However, its value was still directly linked to the value of the Spanish real. In 1885, Chile started to use gold as a standard measure of currency, pegging the peso to the British sterling pound. During this time, 1 peso was equivalent to 1 shilling and 6 pence.
In 1925, coins and banknotes were introduced in cóndores valued at 10 pesos. In 1932, the gold standard was abolished making the value of the Chilean pesos to depreciate. In 1960, the peso had lost its value, and it was replaced by the escudo, which was valued at 1,000 pesos. However, 15 years later the current Chilean peso was re-introduced replacing the escudo. This currency has remained unchanged since then. The 5 and 10-peso coins were circulated in 1976. The coins were gaining fame, and they had circulated the economy for quite some time. In 1981, 50 and 100-peso coins were circulated and in 2000, the first ever 500 peso coins were minted.
When the Chilean peso was re-introduced in 1975, its value was allowed to fluctuate with a crawling peg. It meant that the value of this currency was allowed to rise or drop within a given range that was determined by a centralized value. During this time, the use of money had not been fully adopted in the world; however, during the economic reforms that took place between the 70s and 80s, the use of currency was made more open. Chile was leading in these reforms, which led to the growing value of the peso. The peso was pegged to the US dollar between 1979 and 1982. In 1984, the peso again became independent, meaning its value was not determined by any currency. By 1999, the peso was floating freely against the United States dollar.
Economy of Chile
The economy of Chile is classified as a high-income economy, and it is ranked together with Canada and the United States. The GDP of this country is mainly determined by agriculture, the service industry, and mining. The economy of Chile is projected to rise over the coming years, and Chilean peso needs only to be kept strong and advance with the country’s economy.