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HomeNewsChile’s Incoming Leftist President Moves to Calm Markets With New Finance Minister

Chile’s Incoming Leftist President Moves to Calm Markets With New Finance Minister


Chile’s President-elect Gabriel Boric said he would appoint central bank chief Mario Marcel as finance minister, seeking to ease concerns among investors worried the incoming administration will move the country far to the left.

The December election of Mr. Boric, a former student protest leader whose coalition includes the Communist Party, rattled investors concerned he would carry out a major economic overhaul of Latin America’s most successful model of free market orthodoxy and home to the world’s biggest copper mines.

The appointment of Mr. Marcel, a 62-year-old economist who has held high-ranking economic posts under center-left presidents, signals that the 35-year-old president-elect may follow a market-friendly path once he is inaugurated on March 11.

Early Friday, the Santiago Stock Exchange was up 2.27% while the peso was trading slightly stronger against the dollar after appreciating more than 6% against the greenback so far this year amid growing expectations Mr. Boric will follow more moderate policies.

“It’s a positive development, there is no doubt about it. It is an early sign of policy pragmatism,” said Alberto Ramos, a Goldman Sachs economist who tracks Chile. “Marcel is a low-key, highly-trained technocrat with vast experience in the public sector.”

Mr. Marcel, who has a doctorate from the University of Cambridge, has been a government budget director and head of a committee that proposed reforms to the private pension system. Mr. Marcel also worked at the World Bank and the Organization for Economic Cooperation and Development, the group of affluent countries of which Chile is a member.

Mr. Boric, who will succeed the unpopular center-right President Sebastián Piñera, said Friday that his cabinet would also include close allies on the left from his student protest days a decade ago. Among those who will join him are Camila Vallejo, a communist congresswoman who is well-known abroad for leading demonstrations.

Mr. Boric has pledged to tackle social grievances over issues such as high inequality and what many Chileans consider mediocre public healthcare and education. He has pledged to increase public spending and hike taxes. He also wants to create a state lithium company, and put in place stronger environmental safeguards.

He will take office as a special assembly is writing a new constitution, which is expected to be finished this year and then require approval in a referendum. Most of the assembly members charged with drafting the document come from the left, leading some analysts to expect new rules requiring more public spending and tighter environmental protections.

Mr. Ramos said a key question will be how much independence Mr. Marcel will have in the new government to shape policy.

Mr. Marcel was critical of several of Mr. Boric’s campaign promises, including the politician’s proposals to reduce the workweek and dismantle a private pension system that was once seen as a model. Marcel is “someone who can be the voice of reason in the administration, but that doesn’t mean he is someone who will have the room to work independently,” said Mr. Ramos.

Write to Ryan Dube at ryan.dube@dowjones.com

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