Latin America

Japan, the "carry trade", and the economies of Latin America.

Carry trade and triple arbitrage impact emerging countries due to the difference in interest rates. The interest rate differential between developed and emerging countries such as Mexico, Brazil and Colombia has increased the flow of capital into the financial markets of these countries, which provides more liquidity and public financing. However, it increases the vulnerability of emerging economies to global volatility, as in the case of Japan in August 2024. This article will examine how the Bank of Japan's (BoJ) interest rate hike affected exchange rates in these countries.

Autor:

Jennifer Montoya Madrigal

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Latin America in the complexity of transpacific multilateralism

Latin America's trade with the Indo-Pacific region has become more dynamic in the last decade. It occurred by the emergence of China as an economic power and by the efforts of Latin American integration mechanisms. During this period, LAC exports to the European Union decreased, and those to the United States slowed down. For Latin American and Caribbean countries, the shift from the centre of the world economy to the Pacific basin means the opportunity to decrease their historical dependence on the West and the North Atlantic.

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China: the leap to the Americas' playing field.

The People's Republic of China (PRC) opened the doors of its economy to the world in 1990, leaving behind its 20th-century policy of autarky. It is Chinese foreign policy to safeguard the common interests of humanity, promote multilateralism, and establish a fair and rational international political and economic order. It also protects the world's diversity and advocates the democratisation of international relations and the diversification of development models.

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And Latin America, how are we doing?

The year 2021 was one of recovery after the economic and health crisis. Most governments have followed spending policies since the mid-2020s to cushion the downturn and shore up the recovery. Although almost all countries followed Keynesian macroeconomic prescriptions, the intensity and effects in each country varied. How is the recovery going in Latin America, and what to expect for the region?

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