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Latin American: Monetary Tightening Nearing the End of the Cycle - BBH
![Roberto Jacobs Roberto Jacobs](https://c.mql5.com/avatar/2015/6/55706E50-4CAE.jpg)
Latin American: Monetary Tightening Nearing the End of the Cycle - BBH
According to analysts from Brown Brother Harriman, the tightening cycle of monetary policy in Latin America is nearing the end.
Key Quotes:
“Easing
cycles in Asia and EMEA stand in stark contrast to the tightening
cycles seen in Latin America. Currency weakness played a large role in
the high rates of regional inflation, as Latin America was the hardest
hit region in terms of lower commodity prices. As such, the monetary
tightening has been even more painful (but necessary to help tame
inflation).”
“This is the last of our monetary policy outlooks
for the different EM regions. Brazil was the first to tighten, and will
likely be the first to ease this year. We believe most others
in the region are nearing the end of their tightening cycles, but it’s
too early to talk about easing yet.”
“Colombia -
The central bank is in the midst of a tightening cycle that started in
April 2014. Since then, there has been total tightening of 325 bp that
took the policy rate to 6.5%. However, inflation continues to rise (…)
Next policy meeting is April 29, and another 25 bp hike to 6.75% is
expected then.”
“Mexico - The central bank is in
the midst of a mini-tightening cycle but has been on hold since the
last intra-meeting emergency 50 bp hike to 3.75% in February (…) Barring
a significant collapse in the peso, we think the tightening cycle is
over for the time being.”