Foreign investors are buying Chilean government bonds denominated in local currency at the fastest pace on record, signaling a sharp shift in sentiment toward the South American market.
The surge in demand comes as the country enters a new political era under President Gabriel Boric's successor, with markets pricing in a more business-friendly environment and a series of interest rate cuts throughout 2026.
The influx of capital is being fueled by a combination of a depreciating peso, which offers currency gains for foreign buyers, and a steepening yield curve that provides attractive entry points.
Traders are increasingly positioning for a dovish turn from the Central Bank of Chile, which is expected to lower borrowing costs as inflation pressures ease and economic growth stabilizes.
This development marks a notable divergence from broader emerging-market trends, where risk-off sentiment has often weighed on local-currency debt.
While neighboring Brazil has seen corporate bond issuance hit record highs despite high interest rates, Chile's sovereign debt market is now drawing significant foreign interest due to its perceived policy stability and improving macroeconomic outlook.