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LATIN AMERICA Inflationary Pressures Rising/Currencies Appreciating: To Tighten or not to Tighten?

LATIN AMERICA Inflationary Pressures Rising/Currencies Appreciating: To Tighten or not to Tighten?. Carnegie International Economics Program February 16, 2011. Latin America. Policy Stimulus Resulted in Record Recovery from Global Recession. Percent change over a year ago. f = IIF forecast.

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LATIN AMERICA Inflationary Pressures Rising/Currencies Appreciating: To Tighten or not to Tighten?

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  1. LATIN AMERICAInflationary Pressures Rising/Currencies Appreciating: To Tighten or not to Tighten? Carnegie International Economics Program February 16, 2011

  2. Latin America Policy Stimulus Resulted in Record Recovery from Global Recession Percent change over a year ago f = IIF forecast

  3. Latin America Fiscal and Quasi-fiscal Stimulus were Driving Forces Percent of GDP f = IIF forecast

  4. Monetary Policy: Tightening Cycle Beginning in Some Countries, but Rates Remain Accommodative Latin America percent Brazil Mexico Chile Colombia *US$ / local currency

  5. Latin America Food Prices Adding to Inflationary Pressure Trade weighted average price Source: UN Food and Agriculture World Food Price Index

  6. Latin America Inflation Above Mid-Point of Target Band in Most Countries Percent change over a year ago Actual Inflation Target Band Mid-Point

  7. Latin America High and Rising Inflation in Argentina and Venezuela Percent change over a year ago f = IIF forecast

  8. Latin America Higher Commodity Prices Continue Strengthening Terms of Trade Percent change over a year ago Reuters commodity price index Terms of Trade (LHS) CommodityPrices (RHS) f = IIF forecast

  9. Latin America Capital Inflows Close to Record Levels $ billion f = IIF forecast

  10. Risk-adjusted Returns on Sovereign Bonds Have Risen… Latin America (EMBIG Latin, 30-day volatility)

  11. Latin America …and Bond Issuance has Increased $ billion f = IIF forecast

  12. Latin America Equity Investment is Leading Private Capital Inflows $ billion f = IIF forecast

  13. Currencies Have Appreciated Back Toward Pre-Crisis Levels Latin America (January 2007 = 100) *US$ / local currency

  14. Latin America Real Effective Exchange Rates Have Appreciated Even More Index 2000=100 f = IIF forecast

  15. Latin America Brazil: As Inflation has Increased REER has Appreciated Jan 2006=100percent change oya Inflation REER

  16. LATIN AMERICAInflationary Pressures Rising/Currencies Appreciating: To Tighten or not to Tighten? Carnegie International Economics Program February 16, 2011

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