Latin American currencies have come under pressure this month which will put further upward pressure on inflation, but the bigger picture is that headline rates are at, or close to, a peak across the region. Indeed, headline rates in Brazil and Peru are now on a downward trajectory, which prompted policymakers in the former to end their tightening cycle last week. And most central banks elsewhere in the region will probably follow suit over the coming months. That said, with inflation set to remain above target into next year, we expect that interest rates will remain in restrictive territory for a while yet.
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