As Chilean markets flail, Boric promises to expedite announcement of his cabinet

Gabriel Boric, the left-wing president-elect of Chile, announced that he plans to expedite the announcement of his cabinet in order to “give certainty” to the country’s markets, which fell sharply on Monday after the 35-year-old bested Jose Antonio Kast, a free-market advocate, in the country’s presidential election.   

On Monday, Boric traveled to La Moneda, Chile’s presidential palace, to meet with incumbent president Sebastian Piñera. Met by cheering crowds and the press, he promised that his announcement would come before Jan. 22 – the date on which Piñera announced his cabinet after being elected for his second term.

"We are going to make every effort to make the announcement as soon as possible," he told the press before meeting with Piñera. “We are aware that it is important for the country to provide certainties, which some may like and others may not, but it is important to have certainty of what is to come," he added.

But Boric's visit to La Moneda also brought cause for concern to investors who fear his left-wing agenda. 

After stopping to pay his respects before a bust of Salvador Allende – the socialist president whose rule was marked by rampant inflation and a 23-day state visit by Cuban dictator Fidel Castro – Boric tweeted, "When I stood in front of Salvador Allende's bust, I thought of those who, like him, came before us. Their dreams of a better Chile are the ones we will continue to build together with all of you."

Hoy, visitamos el Palacio de La Moneda, por invitación del Presidente Piñera. Cuando estuve frente al busto de Salvador Allende pensé en los que, cómo él, estuvieron antes que nosotros. Sus sueños de un Chile mejor, son los que vamos a seguir construyendo junto a todos ustedes. pic.twitter.com/iTZQXSnVaC

— Gabriel Boric Font (@gabrielboric) December 20, 2021

Chile’s currency, the peso, fell more than 4 per cent against the dollar on Monday, reaching an all-time closing low. Santiago’s IGPA index also fell more than 6.2 percent – shaking investors and showing the markets’ fear of Boric’s left-wing coalition, which includes Chile’s Communist Party.

The peso’s steep fall — now down nearly 20 percent — began more than six months ago when Chileans voted to change the country’s market-friendly constitution in May, according to Reuters. 

Markets have also reacted to the danger of a constitutional assembly that is dominated by leftist and independent representatives who have pledged to erase all remaining vestiges of Chile’s free-market economic model, which was introduced during the military government of General Augusto Pinochet. 

Ultimately, Boric’s victory “could set off some alarm bells for Latin American assets,” said Ramiro Blazquez, head of research at BancTrust in London.

After leaving La Moneda, Boric told reporters that his new cabinet will be made up of independents from different regions and with gender parity. He also said that it was “important to have a policy of continuity."