Devaluation of Argentine Peso Already Affecting International Travel New stats show that international travel has been hit hard by depreciation. The three aforementioned cities are among the destinations historically most visited by Argentine tourists. However, more recently, demand has fallen drastically due to the dramatic depreciation of the peso against the dollar. In fact, the record of international tourism released by the Indec for the month of June, published yesterday, documented a decline of 2.
IMF agrees on Brazil loan November 13, The funding is expected to help the country bring back overseas investors, restock its currency reserves, and stave off a devaluation.
More specifically, it is intended to protect the currency from devaluation by providing emergency credit lines to discourage speculators. Brazil was hailed as a Latin American success story after implementing an inflation-slashing economic stability plan in But that was before the spending, and before Asia and Russia succumbed to an economic crisis themselves.
If Brazil buckles under the weight of a currency devaluation, economists fear all of Latin America may be thrown into recession. Brazil's currency, the real, has been ravaged since Russia devalued the ruble in August, triggering a massive flight of capital from emerging markets.
The devaluation sent world financial markets tumbling and nearly bled dry Brazilian currency reserves. Analysts say the loan package may rescue Brazil from a similar fate, but it's going to be no picnic ahead for its citizens.
Negotiations between the IMF and Brazil have dragged on for weeks, slowed by elections and congressional haggling over the government's three-year austerity program, which will underpin the international loan package.
John Welch, chief Latin American economist for Paribas, said part of the reason the package has taken so long to pull together is that banks are more gun-shy now after the IMF loan fiasco to Russia in July.
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Officials said the U. Export-Import Bank and the U. Overseas Private Investment Corp.
Regarding speculation that Argentina and Brazil may merge their currencies, much like Europe, Welch said he believes the two countries already have started the process.
But certainly there has been a strengthening of the dollar bloc in this hemisphere and I suspect that's going to continue, especially as integration between Brazil and Argentina goes on.The Dow recovered to close at 9,, down points. Markets in Mexico, Europe and elsewhere also fell sharply.
The Sao Paulo Stock Exchange, Latin America's largest, opened an hour late.
In Latin America, many countries compete on cost with China for sourcing of certain products. The threat of losing production is always there, as currency devaluation occurs on a regular basis. The shock Chinese devaluation of the yuan is yet more bad news for Latin American economies, which are already in or hovering close to recession.
During the first decade of the 21st century, Latin America was seen as undergoing a left-wing transformation, with governments of varying left-wing ideologies, identities and programs coming to power in the majority of the region’s states.
Ecuador default, Colombia devaluation: renewed debt and currency jitters in Latin America By Martin McLaughlin 1 October President Jamil Mahuad of Ecuador announced Sunday that the South.
Latin America. The debt crisis of the s is the most traumatic economic event in Latin America’s economic history. During the “lost decade” that it generated, the region’s1 per capita GDP fell from % to 98% of the world average, and from 34 to 26% of that of developed countries (Bértola and Ocampo, , Table ).