Latin American stocks fell sharply on
Thursday as a Wall Street rally lost steam on heightening
recession worries, while Mexico’s peso rose after the central
bank hiked the key interest rate by a record 75 basis points as
The Mexican peso, which was flat just moments before
the decision, rose 0.3% to 19.98, as it followed data that
showed inflation in the whole country by more than expected in
The peso outperformed Latin American peers, which slid
against a stronger dollar as investors fretted over the impact
of aggressive monetary policy tightening on growth.
The Mexican decision was the latest in a slew of central
banks moves on Thursday.
In a surprising move, Egypt’s central bank kept key interest
rates unchanged on Thursday at 11.25%, Markets were expecting a
hike by 50 bps.
“With inflation set to rise further above the central bank’s
target range, we still think that the next move in rates will be
up, ”said James Swanston, Middle East and North Africa Economist
and Capital Economics.
“We expect a further 150bp of hikes to 12.75%, by the end of
the year – although, following today’s decision and recent
comments, the risk to our forecasts lie to the downside. ”
Egyptian stocks had closed lower before the
decision, while the currency traded flat through most of
Egypt moved in contrast to other central bank decisions on
Thursday which moved as expected: Indonesia stood pat on the
interest rate, as did Turkey despite inflation at 73%.
Philippines hiked by 25 bps but the peso still fell 0.5%
to over 16-year lows.
Surging inflation has seen most emerging market central
banks embark of an aggressive tightening cycle. With energy
prices rising and the US interest rates heading higher, the
banks may have to extend the cycle.
Brazil’s real hit four-month lows, despite a
raise in the central bank’s growth outlook for 2022 to 1.7% from
As oil prices fell, crude exporter Colombia’s peso
dropped 2%. A strike at the world’s largest copper producer in
Chile, saw the country’s currency slip further in
record low territory.
Among stocks, Brazilian and Mexican stocks
slid about 1% each, while Colombia’s COLCAP index and
CHile’s IPSA slumped 2.4% each.
Wall Street struggled for direction with the Down Jones
and the S&P 500 turning to losses at one point, as
investors worried about recession.
Key Latin American stock indexes and currencies at 1858 GMT:
Stock indexes Latest Daily%
MSCI Emerging Markets 994.72 0.11
MSCI LatAm 2026.03 -2.83
Brazil Bovespa 98159.35 -1.37
Mexico IPC 46766.15 -0.8
Chile IPSA 4940.18 -2.3
Argentina MerVal 82972.91 -3.14
Colombia COLCAP 1338.48 -2.46
Currencies Latest Daily%
Brazil real 5.2326 -1.07
Mexico peso 20.0039 0.20
Chile peso 905.2 -1.81
Colombia peso 4096.13 -1.98
Peru sol 3.7549 -1.12
Argentina peso 124.0800 -0.17
(Reporting by Susan Mathew in Bengaluru;
Editing by Nick Zieminski)
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