The region’s interest rate environment has been particularly volatile this year, as Latin governments responded to speculative attacks on their currencies and tried to turn the tide on massive investor flight. The charts below examine the movements in Latin America’s currencies and interest rates, comparing them on a country-by-country basis.
Mexico’s peso-which along with the Peruvian sol is one of region’s only currencies that isn’t restrained by a band or peg-experienced the greatest drop between January and October.
During that period the peso plummeted 26.73%, followed by Colombia’s peso, which fell 22.07%. Ecuador, which like Colombia broke its currency band and devalued this year, saw its sucre drop 7.5% in March and another 11% in September.
Mexican interest rates also experienced considerable volatility, with its 28-day Cetes rate jumping from 17.9% in January to around 33% in October. Argentina and Chile both witnessed their interest rates climb more than 60% during that period. In contrast, Peru’s rates only inched up a 2.11% over the first 10 months of this year. Brazil’s Selic rate reached 42.7% at the end of October, while Venezuela’s rates hit 40.4% in June.
