LONDON, (Reuters) – Chile’s peso surged Monday following the victory of Jose Antonio Kast, a hard-right ex-congressman. Now the attention is shifting to the composition of Congress.

Chile will be heading to a runoff, with Kast and Gabriel Boric (leftist lawmaker) competing on Dec. 19. Kast will benefit from strong performances by the moderate center-right candidates.

Chile’s peso surged 3.7% against dollar to trade at $797.90, marking its most successful day in almost one year.

Alvin Tan, RBC said that the initial results were very positive for Chilean assets because the market would have to eliminate the last week’s risk premia.

We must wait to see if right-wing coalition can increase, or maintain, the current representation to correct our long term/medium-term negative views in CLP.

After two years of violent protests for improvements in living standards, voters have split into those who want to shake up the free-market system and those who demand a tougher line against crime.

Chileans also voted for 155 seats in the lower house and 27 out of 50 seats in the upper house. Conservative and hard-right legislators were expected to have 23 Senate seats. While center-left and hard right lawmakers would be on track for 22 Senate seats. The rest will go to independents.

Diego Pereira, JPMorgan (NYSE): “Against the background of the Constitution Convention the power distribution within the Congress matters more than it has in previous cycles.”

Despite Tuesday’s gains Chile’s peso fell more than 11% from the beginning of the year. This makes it the worst-performing currency in the region for 2021.

Chile’s hard currency bond performance is poorest in Latin America. It returns -16.5%, compared with a -8% return on the regional JPMorgan sub-index.

Vontobel Asset Management’s Head of Emerging Market Bonds, Luc D’hooge stated that a divided Congress could limit radical legislative reforms.