Unidad de Fomento

Infobox Currency
plural = Unidades de fomento
iso_code = CLF
using_countries = Chile
inflation_rate = Inflation adjusted
inflation_source_date =
subunit_ratio_1 =
subunit_name_1 =
symbol = UF
frequently_used_coins = No coins
rarely_used_coins =
used_banknotes = No banknotes
issuing_authority = Banco Central de Chile
issuing_authority_website = www.bcentral.cl
mint = No mint
mint_website =

The Unidad de Fomento (UF) is a Unit of account that is used in Chile. The exchange rate between the UF and the Chilean peso is constantly adjusted to inflation so that the value of the Unidad de Fomento remains constant. It was created on January 20, 1967, for the use in determining principal and interest in international secured loans for development, subject to revaluation according to the variations of inflation. Afterwards it was extended to all types of bank loans, private or special financing, purchases or investments on installments, contracts, and some special situations. Also it is used in legal standards such as the par value of stock/capitalization of companies, fines, etc. It has become the preferred and predominant measure for determining the cost of construction, values of housing and any secured loan, either private or of the Chilean government. Individual payments are made in Chilean pesos (the country's legal tender), according to the daily value of the UF.

For historical and current values of the Chilean Unidad de Fomento (UF), see [http://www.uf.cl www.uf.cl]

A similar currency unit for use generally in payment of taxes, fines, or customs duty is the Unidad Tributaria Mensual (UTM) (literally: monthly tax unit).

For historical and current values of the Chilean Unidad Tributaria Mensual (UTM), see [http://www.utm.cl www.utm.cl]

Evolution of the calculation of the UF

From its creation in 1967, each calendar quarter, the UF value of 100 Chilean escudo would be quoted based on the Consumer Price Index (abbreviated IPC in Spanish) of the past three months, which would be the official rate for the following quarter. In October 1975 with the currency changeover to pesos, the value of 1 UF was quoted in pesos and readjusted monthly. In July 1977 it was calculated daily by interpolation between the 10th of each month and the 9th of the following month, according to the monthly variation of the IPC. Since 1990 the Central Bank of Chile Banco Central de Chile has determined its value. The values of the IPC are officially kept by the Instituto Nacional de Estadísticas de Chile (National Statistics Institute of Chile).

For historical and current values of the Chilean consumer price index (IPC), see [http://www.bcentral.cl/esp/ Banco Central de Chile]

Source: Manually translated (without use of a computer translation program) from the Spanish version of this page.

External links

* [http://corrugatedcity.bl%6fgspot.com/2007/08/inflation-and-mysterious-uf.html Inflation and the mysterious UF] , Corrugated City (a blog), 3 August 2007
* [http://cowles.econ.yale.edu/P/cd/d11b/d1171.pdf Shiller, Robert J. Indexed Units of Account: Theory and Assessment of Historical Experience]