Plain vanilla currency options on U.S. dollar–Chilean peso (USD-CLP) are available
offshore at prices similar to those quoted for U.S. dollar–Australian dollar (USD-AUD) and
U.S. dollar–New Zealand dollar (USD-NZD) options. A simple way to measure the costs of
using currency options for hedging is to use the implied volatility of at-the-money forward
Foreign exchange exposure in Chile is lower than in other countries in the region, and similar
to that observed in small industrialized countries. The most exposed sector is the financial
sector. However, this is not a major source of systemic risk since a recent assessment of
financial sector in Chile suggests that banks can withstand severe exchange and interest rate
shocks successfully.