Santiago becomes 3rd most expensive South American city
Chile's capital, Santiago, has become the third most expensive city in South America, according to a world list published on Tuesday by American consultancy Mercer Human Resource Consulting in its annual report.

On this year's list, Santiago, after two Brazilian cities -- Sao Paulo and Rio de Janeiro -- ranks third among the most expensive South American cities.

Santiago, which was in 128th place on last year's world list, has moved up to 91st. The movement is due not only to the local inflation, but also the Chilean peso's strong appreciation against the U.S. dollar, according to Luis Fernando Higuera, Mercer's representative in Chile.

"As the comparison is in dollars, when we convert our figures into March 2006 dollars, we get much higher prices than we only apply domestic inflation," said Higuera.

On this year's list, Moscow, capital of Russia, replaces Tokyo as the world's most expensive city. Seoul, capital of South Korea, has moved up three places to the second.

The first two most expensive South American cities, Sao Paulo and Rio de Janeiro, rank 34th and 40th respectively on the list.

Mercer survey studies the cost of living in 144 cities worldwide, measuring the cost of over 200 items, including housing, transportation, food, clothing, household goods and entertainment.