![]() The Chilean peso (COP) and the Colombian peso (CLP), the most devalued In Argentina, it is 8% more expensive however, it is the only country where the official dollar price is set by the Central Bank. Compared to the beginning of June, one dollar costs 16% more in Colombia, 14% in Brazil and Chile, 8% in Mexico and 6% in Peru. Latin American currencies are depreciating against the U.S. ![]() However, the average trend is that of a rising dollar, i.e. The currencies of the six largest economies in the region have been on an upward trend recently (between June and July), particularly marked in Colombia, Chile and Brazil, and somewhat more stable in Mexico and Peru. The daily increase in the dollar’s price in relation to the local currency (%)īloomberg historical series. In addition, local tensions have led to a weakening of the region’s currencies, particularly in the last weeks. How do the global context and the strengthening of the dollar affect Latin American currencies?Ī stronger dollar in an unstable global context generates massive movements in the emerging markets, such as those in Latin America, with respect to investments in dollars, which leads to a shortage of the currency and, consequently, an increase in its price. The European Central Bank (ECB) has responded and raised interest rates this week by half a point, the largest increase in 22 years. This measure has driven the strengthening of the dollar to the point that it has reached one-to-one parity with the euro, something that has not happened since 2002. ![]() Federal Reserve (FED) raised its benchmark interest rate to a range of between 1.5% and 1.75%, the largest increase in the last 30 years. In response to this inflationary trend, central banks are raising interest rates in an attempt to cool economies. According to the World Economic Forum, inflation is rising worldwide and food and energy prices are reaching record highs. In the first semester of 2022, the world has faced a scenario of economic uncertainty, given, among other aspects, the accelerated increase in post-pandemic consumption and the invasion of Ukraine, factors that have contributed to a generalized increase in prices, i.e.
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