Rates to stay lower than the market expects

Latin American central banks have taken divergent paths in 2013. Whereas Brazil started to hike interest rates in April, both Colombia and Mexico have trimmed their benchmark rates this year. Meanwhile, policymakers in Peru and Chile have remained on the sidelines, keeping rates unchanged. Going forward, the future path of monetary policy will continue to vary from country to country. Nevertheless, a common theme in our forecasts is that interest rates are likely to remain lower than the market currently anticipates.