Through its newly launched Clients Financial Hub, the Inter-American Development Bank (IDB) is bringing together its sophisticated financial capabilities to collaborate with sovereign nations on longer-term balance sheet strategies. This initiative aims to optimize macro-financial value by holistically managing public assets, liabilities, and compounding financial risks across the region.
Category: Magazine
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Sustainable Finance: Label Optional
Thematic bond issuance in Latin America more than halved last year. Debt managers say the label must now earn its keep, while investors keep funding green projects with or without one.
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Short End of the Stick
Borrowed dollars fed the region’s rally. What happens when the trade turns?
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Private Credit: Credit Where It’s Due
While private credit wobbles in the US, Latin America’s version is still small, lends to borrowers with little debt, and works alongside the banks. The test is whether it stays that way as money pours in.
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Infrastructure Finance: Borrow Now, Fix Later
As the carry trade unwinds and rates stay high, infrastructure sponsors across Latin America are turning to short-term loans. They are betting that cheaper money will come before the bill does.
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Finance Minister of the Year: A Soft Landing
Taking on Panama’s large fiscal deficit was hard enough; turning around a sagging economy at the same time made it tougher still.
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Central Bank Governor of the Year: Anchored in the Storm
Paraguay’s Carlos Carvallo holds inflation down through an oil shock
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Sovereign Debt: Spreading the Risk
With dollars costly and US debt swelling, Latin America is borrowing elsewhere: Europe, Japan, and, increasingly, at home. Spreads have narrowed as Washington looks riskier. The test is whether fiscal discipline holds.
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Local Currency: Home Truths
Latin American sovereigns are borrowing more in their own currencies, at home and abroad, and investors turning away from a weaker dollar are eager to buy. But local debt brings costs and risks of its own.
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Reserves Management: The Price of Safety
Latin America’s central banks have built more than $900 billion in reserves to guard against the next crisis. Keeping that money safe and liquid means giving up returns, so reserve managers are looking beyond the dollar, reaching carefully for yield and bringing in outside expertise, without forgetting what the money is for.