Chilean Peso (CLP)

Founded in 1925, the Banco Central de Chile received the legal monopoly over banknote issuance — ending decades of fragmented note-issuing by private institutions. Today it pursues a clean inflation-targeting mandate: hold annual CPI around 3% over a two-year horizon. The peso floats freely — classified by the IMF as both de jure and de facto free floating. As of late 2026, the policy rate holds at 4.50% with headline inflation registering 4.1%, slightly above target and largely reflecting fuel-related cost pressures across the economy.

Chile holds the rare distinction of having abandoned and then reclaimed its currency's name. On January 1, 1960, the escudo replaced the original peso at 1,000 to 1 — an inflation-driven simplification. But inflation devoured the escudo too. On September 29, 1975, Chile brought the peso back, converting at 1,000 escudos per new peso. Stack those reforms: one modern CLP equals one million pre-1960 pesos. The Central Bank's own historical accounting confirms this cumulative million-to-one conversion — a journey from hyperinflation to hard-won credibility.

Chile struck its first independent coin in 1817 — the Peso Independiente — replacing Spanish imperial imagery with republican symbols. Remarkably, this happened before Chile formally declared independence in 1818. For much of the nineteenth century, monetary arrangements remained fragmented: an 1860 banking law permitted private banks to issue peso-denominated notes, a practice that persisted until the government assumed responsibility for legal banknotes in 1898. Full centralisation arrived only with the Banco Central's establishment in 1925, finally consolidating a chaotic multi-issuer landscape.

Five banknotes circulate ($1,000 through $20,000), with the three lowest on polymer and the two highest on cotton paper — each differing in length by 7 mm to aid accessibility. Chile's economy ties intimately to copper: prices influence export revenues, trade balances, government income, and mining investment simultaneously. Alongside the peso, Chileans rely on the Unidad de Fomento (UF) — not a separate currency but an inflation-indexed accounting unit whose peso value adjusts daily according to CPI data. Few economies depend so heavily on this kind of parallel valuation mechanism.