The fixed income investment community has been shaken up by growing concerns over Greece’s creditworthiness, which appear to be spreading like a bush fire across eurozone peripheral states. While concerns over significant sovereign credit risk are currently limited to the euro area and Dubai, my colleagues at BMI believe that Latin American government credit, too, [Read more...]

Risk Watchdog’s long-held view that the bolivar would sooner or later have to be devalued has finally materialised, with President Hugo Chávez on January 8 announcing the introduction of a dual exchange rate system.

Bolivars will now officially be exchanged for dollars at two rates, VEF2.6000/US$ and VEF4.3000/US$, as opposed to the VEF2.1500/US$ peg that had [Read more...]

Latin America will soon have a new currency, the Sistema Único de Compensación Regional, or Sucre, for short. It’s no coincidence that the currency’s acronym is also the name of 19th century regional independence leader, Antonio José de Sucre, close friend and ally of Simón Bolívar, in whose name the currency’s proponents (members of the [Read more...]

With the return of ousted President Manuel Zelaya to Honduras following June’s military coup, we examine how the political stalemate is likely to unfold over the coming days and weeks, and why events in this small Central American country have taken on such regional importance.

 

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With the spectre of US military bases in Colombia causing another bout of breast-thumping by some regional heads of state, I’ve decided to take a closer look at the age-old debate about whether foreign interest in Latin America is a good or bad thing for the region.

First things first, while US bases appear to have [Read more...]

As part of the recent podcast series addressing the build-up of imbalances in the global economy, Bruce Jeffery provides an insight into the nature of balance of payments crises and how they come about. Stuart Allsopp provides an outlook for the painful adjustment process ahead for Venezuela’s balance of payments.

 

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On February 15 the Venezuelan electorate voted in favour of the constitutional amendment that allows the indefinite re-election of all elected government officials. Crucially, the vote enables President Hugo Chávez to run in the 2012 presidential election, and beyond, providing him with a mandate to accelerate his socialist revolution, which he believes will take until [Read more...]