After weeks of political unrest, Chile is now the riskiest emerging country, surpassing even Greece and Turkey, which have topped the list for quite a while. Chile’s volatility of 21% was about 2 percentage points higher than that of Turkey—the next riskiest emerging country—as measured by Axioma’s Worldwide short-horizon fundamental model. Chile’s volatility almost doubled from mid-October, when protests were triggered by an increase in the subway fare. As protests intensified and more grievances aired, Chilean stocks dropped, posting on Thursday a six-month loss of 15% (denominated in US dollars).
The Chilean peso also took a big hit, weakening last week to an all-time low against the US dollar. While positioned at the high end of its volatility range against the US dollar, the peso is still less risky than the Turkish lira, lagging about 3 percentage points behind it.
See graphs from the Emerging Market Equity Risk Monitor as of 14 November 2019: