The markets awaited the Brazilian central bank’s interest rate decision late Wednesday, with analysts expecting it to hold at 12.50%. The market seems to be pricing in cuts by the end of the year, and speculation has grown that the COPOM committee might even bring a cut in August. The markets had been pricing in a “considerable chance” that rates would be cut, Itau says, forecasting a pause and noting it expects easing of the Selic rate ahead.
Category: Economy & Policy
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Overblown Bubbles
Fears of a credit bubble in Brazil may be overblown. Loan growth remains robust but it is slowing as central bank measures kick in.
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Tough Talk
Trinidad’s tough-talking energy minister is powering change in the vital energy sector. Can he bolster production levels and help the sluggish economy?
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Turning the Corner
The Dominican Republic is on a path to recovery as FDI flows increase and more investors buy its debt in the local and international bond markets. Will politics ruin the party?
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Upside Potential
Venezuela’s presidential elections are still more than a year away. But the possibility of regime change is already moving spreads. Are investors blind to the underlying risks?
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Après Moi…
Venezuela’s presidential elections are still more than a year away. But the possibility of regime change is already moving spreads. Are investors blind to the underlying risks?
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Belize pulls the plug
FDI-starved Belize would normally welcome a surge in investor interest, but the tiny nation is grabbing attention for all the wrong reasons.
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Catching Up
LatAm infrastructure spending is lagging behind emerging market peers. Private sector investments may take up the slack, but are governments doing enough?
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End of an Era?
Brazil’s economy has had a good run, but analysts are readying themselves for tougher times ahead. Can the government and monetary authorities make a difference?
Posted inDaily Brief
Peru Gets Lift From S&P
Peru’s credit quality continues to improve with S&P upping the sovereign’s long-term credit rating to BBB from BBB minus Tuesday. The agency expressed confidence that President Ollanta Humala would continue to implement fiscal and monetary policies that would support stronger growth. While the president has promised to increase social and infrastructure spending as well as public sector wages, the government has said it would carry out these plans within the limits of fiscal constraints, tying expenditures with increased revenues. “Assuming a fairly steady currency, net general government debt to GDP likely will continue to gradually decline over the next three years,” it says. As rating constraints, the agency points to high poverty levels and a significant level of dollarization. “We likely would upgrade Peru if economic growth outside sectors related to energy and mining accelerates, dollarization diminishes significantly and fiscal performance does not fall victim to potential political rifts,” it adds. The outlook remains stable.