Currencies in Latin America were on
track for their best monthly performance in eight months as the
U.S. dollar tumbled from multidecade highs on expectations that
the Federal Reserve will soon slow the pace of its interest rate
The MSCI’s index for Latin American currencies
was 0.3% higher at 1500 GMT and was on track for
its best month since May, outperforming the broader emerging
Investors were focused on a host of central bank rate
decisions this week from developed market peers, with a Federal
Reserve rate decision on Wednesday, as well as Bank of England
and European Central Bank rate decisions on Thursday.
“Massive inflows into EM assets so far this year show that
investors are not deterred by the narrowing rate differentials,”
Natalia Gurushina, emerging markets fixed income economist at
VanEck, said in a note.
The International Monetary Fund on Monday raised its output
growth estimate on emerging markets for this year, with
projections now showing the economic slowdown in the region may
have bottomed out in 2022.
Brazil and Mexico, Latin America’s largest economies, were
both upwardly revised in their 2023 economic growth by 0.2 and
0.5 percentage point, respectively.
The Mexican peso edged up against the dollar, lagging
other Latin American peers.
Data showed Mexico’s economic growth slowed to 0.4% in the
fourth quarter amid tighter monetary conditions in Latin
America’s second-largest economy, but still ended 2022 in
Meanwhile, two company sources told Reuters that Mexican
state oil firm Petroleos Mexicanos (Pemex) will issue a bond
soon worth around $1.5 billion to refinance debt.
The Colombian peso recovered 0.7% to 4,619 against
the dollar after sharp losses in the last two sessions.
The currency of Latin America’s fourth largest economy was
on track for its best month since November 2020, even as
inflation remained persistent despite signs of slowing growth.
The technical team of Colombia’s central bank on Monday
revised its inflation projection for this year to 8.7% from 7.1%
previously, amid high prices which have led the bank’s board to
make sharp increases in borrowing costs.
Currencies of copper producers Chile and Peru
added 1.2% and 0.2%, respectively, supported by a muted dollar,
while the Brazilian real gained 0.6% against the
Brazil’s economic policy secretary Guilherme Mello said
discussions on changing inflation targets were not on the agenda
of the Finance Ministry.
Key Latin American stock indexes and currencies at 1500 GMT:
Stock indexes Latest Daily %
MSCI Emerging Markets 1031.57 -1.19
MSCI LatAm 2334.87 0.63
Brazil Bovespa 113252.27 0.87
Mexico IPC 54261.26 -0.48
Chile IPSA 5327.94 -0.19
Argentina MerVal 248404.33 1.029
Colombia COLCAP 1274.25 -0.47
Currencies Latest Daily %
Brazil real 5.0831 0.60
Mexico peso 18.7555 0.03
Chile peso 797.4 1.19
Colombia peso 4631 0.43
Peru sol 3.8479 -0.26
Argentina peso (interbank) 186.8800 -0.16
Argentina peso (parallel) 379 1.06
(Reporting by Bansari Mayur Kamdar in Bengaluru; editing by