Latin American Currencies

July 6, 2018


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They will continue rising Latin American currencies? when the World Bank makes a study and expected that Brazil will continue to grow and that can, in 2016, be it fifth largest economy in the world, you are placing us a challenge, Luiz Inacio Lula da Silva, President of Brazil. Latin American currencies continue under pressure toward appreciation against the greater flow of capital that is coming to the region product of the desire of good returns by investors. It will thus continue the trend? Other Latin American currencies could join this group? You should not surprise us that is still occurring in Brazil. Despite the entry of capital tax, incentives for investors to continue facing the Brazilian economy, are still present. Is that the strength of the economy of Brazil and very good perspective that observes and growth that generates the kind of praise that just made the World Bank, make investments have an important return waited with a limited level of risk.

And that risk is also limited in the feeling of the market due to the prudent policies that Lula’s Government, develops as the referred tax, to avoid stress in the economy. The region is in the sights of investors who recognize the test surpassed by these economies, with the recent international financial crisis, a clear sign of maturity of Government and Latin American economies that increase the probability of observing a real evolution in the region toward economic development. The attraction that is keeping the region for investors is manifested in continuous pressure that are suffering most of the Latin American currencies toward appreciation. For example, the Brazilian real is so far the currency that was most appreciated in the year in a magnitude of 35% (which spent 2.31 reais earlier this year to the current level of 1.71 reais to the dollar), followed by the Chilean peso, which appreciated by 20% (which went from $638 to $532 in so far of the) year), and the Colombian peso that made by 17% (from $2.247 to the 1915 $ per dollar throughout the year).