Latin America Economics Update What next for monetary policy in Peru? Peru’s economy appears to be suffering one of the largest economic hits of any country from the coronavirus, which is likely to spur further policy easing. With short-term interest rates essentially... 18th June 2020 · 3 mins read
Latin America Economics Update Copom tempers hopes for further large rate cuts The statement from yesterday’s Brazilian central bank meeting poured cold water on expectations in the market that the Selic rate would be cut further from its current level of 2.25% to as low as 1.00... 18th June 2020 · 3 mins read
Latin America Economics Update Chile central bank delves into unconventional toolbox The decision by Chile’s central bank to leave its policy interest rate unchanged at 0.50% was accompanied by a statement which appeared to unveil a QE programme. The finer details will be fleshed out... 17th June 2020 · 3 mins read
Latin America Economics Update Latin America’s lockdown conundrum Most policymakers in Latin America are easing lockdowns even though the region is now the epicentre of the coronavirus pandemic. This may be less economically damaging than keeping stringent... 16th June 2020 · 3 mins read
Latin America Economics Update Finding the floor for rates in Latin America Our Taylor Rules suggest that monetary easing cycles have further to run in Brazil, Mexico and Colombia, and we have pencilled in additional interest rate cuts in all three countries. Moreover... 11th June 2020 · 5 mins read
Latin America Economics Update How will Latin America cope with higher public debt? Governments in Chile and Peru should be able to live comfortably with a jump in their public debt-to-GDP ratios this year. Those in Colombia, Mexico and, to a greater extent, Brazil will struggle. The... 9th June 2020 · 5 mins read
Latin America Economics Update Argentina: restructuring deal may not be enough The recent progress in talks between Argentina’s government and bondholders suggests that a debt restructuring deal is increasingly likely. However, we are sceptical of the IMF’s view that the... 4th June 2020 · 5 mins read
Latin America Economics Update Taking stock of lockdown damage as outlook worsens The latest activity data suggest that stringent lockdowns are causing especially deep falls in GDP in Peru and Argentina. But with the region as a whole struggling to contain outbreaks, and limited... 3rd June 2020 · 3 mins read
Latin America Economics Update Peru: deeper downturn, but fast recovery Q1 GDP data from Peru suggest that its lockdown is having a bigger impact on activity than measures elsewhere in Latin America. And with new infections in Peru surging in recent weeks, we are revising... 22nd May 2020 · 3 mins read
Latin America Economics Update Argentina’s D-day & what it means for restructuring Barring an eleventh hour deal out of the blue, Argentina’s ninth sovereign default will be confirmed on Friday and, while this event is unlikely to surprise many in the markets, it will up the ante on... 21st May 2020 · 4 mins read
Latin America Economics Update Brazil’s Covid-19 crisis & the mounting economic toll The continued rapid spread of the coronavirus through Brazil means that the economy will pull out of its slump more slowly than in many other emerging markets. And with the crisis challenging the... 20th May 2020 · 3 mins read
Latin America Economics Update Colombia’s downturn worse than we feared The weaker-than-expected Q1 GDP figure, coupled with signs that Q2 is shaping up to be worse than we had initially thought, has prompted us to revise down our estimate for the fall in Colombian GDP... 19th May 2020 · 2 mins read
Latin America Economics Update Are investors too sanguine on Colombian debt? Colombia’s public debt ratio will rise sharply this year and we disagree with the consensus view that it will fall back from 2021. This is likely to limit any recovery in the Colombian bond market... 14th May 2020 · 3 mins read
Latin America Economics Update Argentina: comparisons with 2001/02 One major difference between Argentina’s current crisis and the historic 2001/02 episode is that the hit to private sector balance sheets should be smaller. So even though the coronavirus will cause a... 11th May 2020 · 4 mins read
Latin America Economics Update Copom set to cut further, Chile’s CB stays the course The Brazilian central bank’s 75bp cut in the Selic rate last night and the dovish tone of the accompanying statement has prompted us to pencil in a further 50bp of cuts (to 2.50%) in the coming months... 7th May 2020 · 3 mins read
Latin America Economics Update Brazil and Mexico set for double-digit contractions The collapse in the confidence surveys in Brazil and Mexico last month point to a contraction in activity that exceeds that experienced in each economy during the Global Financial Crisis. And with... 5th May 2020 · 2 mins read
