Latin American currencies. (Adobe Stock)

Latin American currencies. (Adobe Stock)


LatAm in Focus: Superpesos? Coldplay Dollars? Inside Latin America's Currency Markets

How have some Latin American countries kept currencies steady against the strong dollar? XP Investment’s Alberto Bernal talks with AS/COA's Randy Melzi.

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Alberto Bernal
Alberto Bernal

The pandemic era has presented non-stop macroeconomic challenges for Latin America. From quarantine-induced shutdowns to high deficits sparked by social spending, governments and central banks have endeavored to implement policies to spur growth while maintaining fiscal solvency.

That task has been complicated by the strength of the U.S. dollar. The currency has appreciated against most other currencies globally, especially in Europe.

But the picture is more mixed in Latin America, where countries have managed to keep currencies holding their value steady against the dollar. “Kudos to most of the central banks in the region. I’ve got to put it that way. They reacted fast. They reacted aggressively,” said Alberto Bernal, chief emerging markets and global strategist at XP Investments.

Randy Melzi
Randy Melzi

The economist talked with AS/COA Vice President Randy Melzi about how smart policies by central bankers and governments alike have helped keep currencies like the Mexican peso and the Brazilian real steady against the U.S. dollar. “There seems to be much more willingness from public officials and the population to take the pain of having higher rates instead of having to live with much higher rates of inflation,” Bernal said.

And with inflation slowing in Latin America, Bernal expressed optimism with the region’s fiscal future, especially if governments can guarantee stability and predictability with policies. He pointed Uruguay, Chile, and Brazil as examples for why to feel bullish about some countries while expressing concern for “anti-establishment, anti-market, anti-business policies” he sees elsewhere in the region.

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Want to know the answers to Randy Melzi's lightening round quiz at the end of the episode? Here you go:

B. What country’s taxi drivers have the most sophisticated understanding of currencies?

C. What country has no paper money—only coins!

D. The president of the central bank of this country has repeatedly won the “best Central Banker of the region” award.

E. Which country has changed its currency’s name nine times (with seven different names) since 1942? 
Brazil: Réis, Cruzeiro, Cruzado, Cruzeiro Novo, Real, Cruzado Novo

Luisa Leme is our executive producer. Chase Harrison co-produced this episode and authored the text on this page.

The music in this episode is "Adiós Fulana" (A.M. Peñaloza) performed by La Manga for Americas Society. Learn more at: