By Drew Benson
Nov. 19 (Bloomberg) -- Chile's peso declined for a third day as the price of copper fell on concern that the global economic slowdown will decrease demand for the base metal.
The Chilean currency fell 1.1 percent to 655.02 per dollar at 9:13 a.m. in New York, from 647.80 yesterday. The peso touched 658.15 per dollar, its lowest since Nov. 3.
``The peso's slide has to do with the increase in global uncertainty, but there are also domestic factors that are putting pressure on the peso'' to decline, said Miguel Cardoso, the head of economic research at BBVA Chile in Santiago. Among these, export revenue from copper is declining, while falling imports of durable consumer goods indicate the local economy is cooling rapidly, he said.
``This makes it more probable that the central bank will have to lower rates rapidly in early 2009 and that is already being reflected in yields at the longer end of the curve,'' Cardoso said.
The South American nation is the world's top supplier of copper.
The yield on a basket of five-year Chilean peso bonds in inflation-linked currency units was unchanged at 3.3 percent, according to Bloomberg composite prices.
In Argentina, the peso slid for a sixth day, dropping 0.2 percent to 3.3263 per dollar, from 3.3207 yesterday.
The yield on Argentina's inflation-linked peso bonds due in December 2033 rose 4 basis points, or 0.04 percentage point, to 23.876 percent, according to Citigroup Inc.'s local unit.
To contact the reporter on this story: Drew Benson in Buenos Aires at abenson9@bloomberg.net
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