A clear divergence in the outlook for monetary policy across the region has opened up over the past month. Policymakers in Brazil have signalled that they will act aggressively to calm fears about overheating and rising inflation. Meanwhile, more moderate inflation pressures mean that monetary tightening in Peru and Chile (set to begin in August) will be more gradual, moving rates from the current ultra-loose levels towards a more neutral stance. By contrast, rates look set to remain on hold at historic lows in Mexico, and now Colombia, until the second half of 2011.