All eyes will be firmly fixed on today’s US FOMC meeting in anticipation of the announcement that the Fed will begin scaling back its programme of asset purchases under QE3. But for the economies of Latin America, the outcome of this evening’s meeting has an added historical significance. It is frequently argued that a shift by the US authorities towards a tighter monetary policy stance played a significant role in the crises of the 1980s and 1990s. The good news is that improved fundamentals in most of the region’s major economies mean that the chances of a classic debt or currency crisis are a lot lower this time around. Instead, the most pressing risks to Latin America are now home grown.
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