Chile stocks rise 6 per cent after constitutional referendum deal

The Santiago Stock Exchange rose more than 6 per cent shortly after opening Friday after political parties agreed to hold a constitutional referendum, a key demand of protesters to resolve weeks-long unrest.

The main S&P ISPA index rose 6.19 per cent and the peso rose 13.10 pesos against the dollar to trade at 789.53.

The government announced an agreement to hold a referendum to change the country's dictatorship-era constitution, a key issue in the protests, because the current one does not establish the state's responsibility to provide education and healthcare.

Lawmakers in Chile's National Congress agreed early Friday to hold the plebiscite in April 2020 after hours of intense negotiations between the governing coalition and opposition parties.

 

"This agreement is a first step, but it is a historic and fundamental first step to start building our new social pact, and in this the citizenry will have a leading role," said Interior Minister Gonzalo Blumel.

The referendum will ask voters whether the constitution should be replaced and if so, how a new charter should be drafted, Senate president Jaime Quintana said.

The unrest that began on October 18 with protests against a rise in rush-hour metro fares has mushroomed into a broader outcry against the status quo, with burning, looting and daily confrontations between demonstrators and police.

The crisis is Chile's biggest since its return to democracy in 1990, leaving 20 dead -- five at the hands of state forces -- and more than 1,000 injured.

Demonstrators have demanded greater social reform from the government led by President Sebastian Pinera, who has announced several measures in a bid to assuage public anger.

After weeks of sometimes violent demonstrations, most polls show the protest movement is supported by 75 percent of Chileans.

Even more -- 87 per cent, according to a survey by pollster Cadem published this month -- say they favor the protesters' demand for constitutional reforms.