Latin America Economics Update BANREP turns more hawkish, but rate hikes likely to be gradual The Central Bank of Colombia (BANREP) held interest rates at 3.0% last night, as expected. But the accompanying statement was more hawkish than in previous. There is a risk that interest rates will... 1st February 2011 · 1 min read
Latin America Economics Update Tombini makes his mark The minutes from this month’s meeting of the Brazilian Monetary Policy Committee (COPOM) were unequivocally hawkish and should banish any lingering concerns about a shift in policy priorities under... 28th January 2011 · 1 min read
Latin America Economics Update Rising inflation to be met with unorthodox measures With the notable exception of Mexico, containing inflation remains the immediate challenge for policymakers in Latin America. Although the pick-up in inflation looks set to be driven by food and... 24th January 2011 · 1 min read
Latin America Economics Update Interest rate hikes remain a distant prospect in Mexico As expected, the Central Bank of Mexico (BANXICO) held interest rates at 4.5% this afternoon. Speculation is mounting that rising food prices could trigger a rate hike over the coming months but the... 21st January 2011 · 1 min read
Latin America Economics Update Tombini starts with a hike, attention now turns to fiscal policy Last night, the Brazilian Central Bank (BCB) hiked interest rates by 50bps to 11.25%. Rates will probably be increased by another 50bps at March’s meeting too. But if rumours of a fiscal tightening... 20th January 2011 · 1 min read
Latin America Economics Update Credit risks are growing, but banking sector still strong Latin America’s financial system is still in good shape, especially when compared to that of the developed world. Nevertheless, lending has accelerated throughout the region and default rates, notably... 18th January 2011 · 1 min read
Latin America Economics Update Chilean rates on hold, but further hikes are likely Last night, the Central Bank of Chile (CBC) held interest rates at 3.25% but highlighted the need for further monetary tightening. Accordingly, we are sticking to our below-consensus forecast for... 14th January 2011 · 1 min read
Latin America Economics Update Tighter fiscal policy is still the key for Brazil Contrary to claims by some commentators, we think that tighter fiscal policy has a key role to play in ensuring that Brazil meets its current inflation/inflows challenge. Indeed, we would go as far to... 14th January 2011 · 1 min read
Latin America Economics Update Mexico: Outlook improving, but still lagging behind We are revising up our forecast for Mexican GDP growth this year. With consumer demand recovering more strongly than we had originally anticipated and the neighbouring US economy set to receive a... 10th January 2011 · 1 min read
Latin America Economics Update Three challenges for 2011 Policymakers in the region will face three challenges this year: keeping inflation under control, preventing asset price bubbles from building and managing currency appreciation. All are consequences... 7th January 2011 · 1 min read
Latin America Economics Update Peruvian rates heading to 4.5% Last night, the Central Reserve Bank of Peru (BCRP) unexpectedly hiked interest rates by 25bps to 3.25%. With the economy set to grow by 6% this year and the outlook for inflation deteriorating, we... 7th January 2011 · 1 min read
Latin America Economics Update First thoughts on Dilma's first week Although it is still very early days, Brazil’s new president, Dilma Rousseff, has made tackling the recent pick-up in inflation an immediate priority. But with cuts in public spending now looking... 5th January 2011 · 1 min read
Latin America Economics Update Chile joins the 'currency war' The Central Bank of Chile (CBC) will begin intervening in the currency market tomorrow in a bid to weaken the peso. But while the peso has fallen by 5% against the dollar today, history suggests that... 4th January 2011 · 1 min read
Latin America Economics Update Argentina slows in Q3, but overheating still the big threat Official GDP data continue to overstate growth in Argentina but there is still no doubt that the economy has experienced an impressive v-shaped recovery. The problem is that growth has been fuelled by... 20th December 2010 · 1 min read
Latin America Economics Update Chilean rates edge higher but future pace of tightening will slow The Central Bank of Chile (CBC) hiked interest rates by 25bps to 3.25% last night, as expected. But the tone of the accompanying statement was less hawkish than in previous months, reinforcing our... 17th December 2010 · 1 min read
Latin America Economics Update Could the next move in Brazilian rates be down? The incoming administration in Brazil has a historic opportunity to re-balance the policy mix in favour of tighter fiscal policy and looser monetary policy (and a weaker currency). What’s more, there... 16th December 2010 · 1 min read
