International Financial Crisis

The international financial crisis has impacted significantly on economic context faced by monetary policymakers in the countries of Latin America. The challenge now faced by Latin American central banks is undoubtedly a greater degree of complexity that it faced just a couple of months ago. The focus of the main problem is changing from inflation concerns to the exchange rate volatility. And to make matters worse, such is the volatility experienced by markets that this impacts on the transmission channels of monetary policy making uncertain the impact of management decisions in the interest rates on inflation and output of the economies . The turmoil of recent days have boosted the dollar value of Latin American countries. Brazil is the most obvious case where the value of the dollar relative to the real fell from R $ 1.556 last August 4, at R $ 2.325 last Friday. In the case of Argentina, the dollar rose from $ 3.04 at the beginning of September to $ 3.27 at the close of the last day.

In Chile, the dollar went from $ 505 in early August for $ 637, while in Peru increased from 2.80 to 3.10 soles soles in that period. a The differential swings in the dollar rate between the countries of the region can lead to problems of intra-regional competitiveness. As commented in the article last Friday of the real devaluation in Brazil. . . More problems for Argentina? a Argentina has already begun to worry about the possible invasion of Brazilian products and is considering action.