The pace of decline in Latin America’s economy has eased, as the global environment has stabilised and monetary and fiscal stimuli gain traction. As a result, interest rates in Brazil, Mexico, Colombia and Chile now look to have troughed as the region’s most aggressive easing cycle in history comes to an end. But with the global recovery set to disappoint it is too soon to rule out further cuts. Either way, we think that policymakers will be forced to keep rates low until late next year. By contrast, the markets are pricing in rate hikes by the middle of 2010.