LATAM CURRENCIES: Ready or not

Nov 1, 2013

Latin American policymakers tell LatinFinance they are bracing for further currency falls

Across Latin America, policymakers are preparing for an end to the extraordinary monetary stimulus in the US, even as markets bet that the Federal Reserve will delay the unwinding of its bond-buying program into next year. Some, including the central banks of Brazil, Peru and Chile, had stepped up interventions in their currency markets in recent years as stimulus measures by developed world central banks triggered rampant capital flows to emerging markets, putting upward pressure on currencies (see chart). But today, that dynamic is reversing, with authorities in some cases acting to prop up their weakening currencies,...

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