THE latest fall in the value of the dollar has led one booming third-world export economy to look elsewhere for a stable reference currency on which to peg its own.
Chile's Central Bank surprised local business and trade circles with an announcement July 3 that the Chilean peso would no longer be measured exclusively against the United States currency but rather would use a "basket" of the dollar, the German mark, and the Japanese yen in a 50-30-20 ratio.
"This will make us more independent of US monetary policy, which is no longer rigorously anti-inflationary as we approach November," said economist Juan Andres Fontaine, former director of research for the Central Bank and considered the "inventor" of the new policy.
For over a year Chile has suffered from a problem unusual for a developing country: too many dollars and a too-strong currency. Despite a lingering load of debt from the 1980s, Chile's trade surplus has been so large for so many years running that the country has built up an excess of hard currency.
In addition, foreign investment has poured into a number of ambitious projects, especially in the mining sector, causing even more dollars to pile up in the treasury. So many dollars are circulating that the peso value of the US currency has steadily dropped.
Exporters, who are still the centerpiece of the Chilean economic model, are now earning dollars whose value does not keep pace with domestic inflation, still running at around 15 percent a year.
For example, a fruit exporter who was cashing in his overseas earnings at the beginning of 1992 could get nearly 380 pesos for each dollar. At the time of the Central Bank announcement, the same exporter was getting only 350 pesos per dollar, while local costs continue to rise.
Finally, local interest rates are much higher than US rates, especially after the latest reductions aimed at engineering a recovery in the US economy. Speculators were tempted to convert even more dollars to pesos to earn high Chilean interest rates, thus further depressing the dollar's value and harming Chilean exports.
The Central Bank's move was designed to halt this speculative flow. The adjustment is also consistent with Chile's trading patterns, as Japan has now overtaken the US as Chile's No. 1 customer. (The US remains Chile's principal overall trading partner.)
Since the announcement, the dollar has surprised local economic pundits by creeping steadily upward. "The policy is working as I had hoped," says Mr. Fontaine, confirming that the peso-dollar divorce "is permanent."