Three South American powerhouses join forces in combined foreign exchange platform
Three of the fastest growing countries in South America have announced that they will be integrating their foreign exchange framework in order to facilitate money exchange operations. Colombia, Chile and Peru have announced the new foreign exchange framework will operate within the existing Integrated Latin American Market (MILA), which already operates a combined stock market for the three countries.
According to MILA over 4230 trade operations are recorded daily between Colombia, Chile and Peru, through over 128 intermediates in the financial sector. The average turnover of these transactions is close to $2.8bn.
“The regional market of foreign exchange will operate as an ideal complement for MILA, because it helps the managers to better administer the foreign exchange risk and break cost barriers”, Alejandro Rubio, head of Datatec, Peru told MercoPress. Datatec is the tech companies behind the new combined platform for trading in financial instruments, through its Financial Market System, which is used in the departments of treasury and financial institutions and foreign institutional investors.
The new forex platform will build on the existing MILA combined stock markets, which has been functioning since 2012. The Electronic Bourse of Chile, the Colombian Stock Exchange, and the Peru Stock Exchange will all feed into the Datatec platform in order to create the new service. However, despite the integration of the foreign exchange mechanisms, domestic level money exchange markets in the three countries will continue to function normally and independently.
The head of the Colombian stock exchange, Juan Pablo Cordoba told Randy Havre of Ilovechile: “With the integrated platform we will have real statistics on money exchanges among countries along the south Pacific, which will help advance with the development of MILA.”
The three countries are already involved in the Alliance of the Pacific with Mexico, which aims to aggressively pursue foreign investment, promote the local private sector and free markets. Colombia, Chile and Peru grew four percent, 5.6 percent, and 6.3 percent respectively in 2012 but have since slowed down as most emerging market currencies have started to struggle against the dollar.