Pacific Alliance economies: Inflation, interest rates and implications
Scotiabank Market Points
00:00
Inflation in the Pacific Alliance
The pandemic related surge in commodity prices is good for their economies but also represents an increase in the cost of doing business. There have been some uncertainty financial markets that led to an exchange rate depreciation and when exchange rates depreciate it makes things more expensive. So you've had, effectively, in Latin America, a longer period of high inflation over the last 18 months than you've experienced in the more northern countries. That is something that obviously policymakers have responded to in a pretty aggressive way.
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