Colombian President-elect Gustavo Petro’s choice of José Antonio Ocampo as his finance minister provides an early sign that Petro will govern as an economic moderate. Mr Ocampo will also sit on the central bank’s board, which faces an increasingly tough inflation challenge. Indeed, after this week’s 150bp hike in the policy rate (to 7.50%), the risks to our interest rate forecast (9.00% by end-22) are skewed to the upside. Finally, as we warned was likely, Argentina's sovereign dollar bond spreads have widened amid a growing sense that the country’s latest IMF deal may already be fraying.
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