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Chilean Financial Regulations Compendium is amended to incorporate new foreign risk-free reference interest rates
August 24, 2021

Resolution 2416-01-210819, issued by the Board of the Central Bank of Chile and published yesterday, August 23rd, in the local Official Gazette, agrees to include foreign reference rates to those that can be agreed upon in foreign currency agreements with variable rates granted by financial institutions to persons domiciled and residents in Chile.

Until before this Resolution, such interest rates were Libor rate, Prime rate and other reference interest rates broadly renowned and used in the international financial markets.

The Resolution adds to the above-mentioned rates, foreign reference risk free rates such as SOFR (Secured Overnight Financing Rate), ESTR (Euro Short-term Rate), SONIA (Sterling Overnight Index Average), TONA (Tokyo Overnight Average Rate) y SARON (Swiss Average Rate Overnight).

The same rates can be also used in interest rates and fixed-income securities prices hedge transactions.

AUTHOR: Diego Peralta.

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