Latin America Economics Update Will the next big move in interest rates be down? Policymakers in some countries have raised the prospect that interest rates may be cut in response to recent rapid currency appreciation. But while we would not dismiss the possibility altogether –... 10th November 2010 · 1 min read
Latin America Economics Update Inflation being driven by rising food prices... for now The raft of data released over the past day or so show that inflation across Latin America is accelerating. For now, the pick-up has been driven by food prices. But with growth set to remain strong in... 9th November 2010 · 1 min read
Latin America Economics Update Will the G20 agree to current account targets? The G20 Summit in Korea next week (11th – 12th) will be overshadowed by the fall-out from “currency wars”, hampering any attempt at the improved coordination of policies necessary to help rebalance... 5th November 2010 · 1 min read
Latin America Economics Update Chilean recovery remains in good shape The Chilean economy is growing at a healthy clip and, notwithstanding a sharp fall in copper prices, the risks to our forecast are now to the upside. Interest rates are likely to continue to rise... 5th November 2010 · 1 min read
Latin America Economics Update Brazilian growth looking increasingly unbalanced Brazilian industry is well and truly stuck in a rut, due in part to the recent strength of the real. Continued growth in the consumer-facing sectors should keep the recovery from stalling but at the... 4th November 2010 · 1 min read
Latin America Economics Update Peru: Early warning signs of higher inflation in 2011 The outlook for inflation in Peru is deteriorating but the policy response is not straightforward. Interest rate hikes would only serve to increase speculative inflows of ‘hot money’, while fiscal... 4th November 2010 · 1 min read
Latin America Economics Update Latin America's impossible trinity The so-called ‘impossible trinity’ suggests that the only way that governments in Latin America can resist further currency appreciation is to either impose strict capital controls or align monetary... 3rd November 2010 · 1 min read
Latin America Economics Update Colombia: 'Currency war' has only just begun A raft of measures announced by the Colombian authorities late last week are unlikely to have much impact on the value of the peso. In the absence of a drop in commodity prices, capital inflows are... 1st November 2010 · 1 min read
Latin America Economics Update Is Argentina about to change course? While the death of the powerful former President of Argentina, Nestor Kirchner, is sad news, speculation is mounting that it will lead to a brighter outlook for the economy. It is too soon to tell... 28th October 2010 · 1 min read
Latin America Economics Update Brazilian interest rates on hold as currency concerns mount Last night, the Brazilian Central Bank held interest rates at 10.75% for the second consecutive month. Concerns about the strength of the real mean that rate hikes are off the agenda for the... 21st October 2010 · 1 min read
Latin America Economics Update How should Brazil respond to capital inflows? The recent influx of foreign capital into Brazil is likely to be sustained over the coming months and quarters. But while this should ensure that the economy continues to grow at a decent pace, there... 19th October 2010 · 1 min read
Latin America Economics Update Learning to live with higher capital inflows Policymakers across the region are facing a tricky balancing act. On the one hand, capital inflows are likely to remain healthy over the coming months. Additional liquidity generated by further policy... 18th October 2010 · 1 min read
Latin America Economics Update Chile responds to soaring peso Last night’s decision by the Central Bank of Chile (BCC) to slow the pace of monetary tightening was driven entirely by currency considerations. Fiscal policy will have to play a key role in managing... 15th October 2010 · 1 min read
Latin America Economics Update Higher commodity prices to bring fresh set of policy challenges We have nudged up our near-term projections for commodity prices in response to recent rises and as a result have revisited our forecasts for Latin America. Growth is still likely to slow next year... 14th October 2010 · 1 min read
Latin America Economics Update Brazil Election Watch: Markets unmoved by election uncertainty The Brazilian presidential election is set for a second round of voting on 31st October and the latest opinion polls suggest that it may be a tighter race than many had expected. While Dilma Rousseff... 13th October 2010 · 1 min read
Latin America Economics Update Peru: BCRP pause, underlines gradual pace of rate hikes The Central Bank of Peru’s (BCRP’s) surprise decision to hold interest rates at 3.0% last night adds weight to our view that rate hikes will be gradual. We continue to expect rates to end next year at... 8th October 2010 · 1 min read
