Accessibility links

Latin American Stocks Plunge on Economic Uncertainty


Latin American stocks sank for a fourth consecutive day Thursday despite efforts by countries like Brazil and Mexico to pump capital into their economies and sell dollar reserves to ease credit and prop up currencies.

Brazil's Bovespa index, which had made gains during the day, reversed course and closed down four percent (1,513 points) to 37,080. The decline came although Brazil sold dollars in a bid to stabilize its real against the U.S. dollar, and the central bank said it would ease limits on the reserves that banks are required to hold. Brazil is Latin America's biggest economy.

Mexico's stock exchange closed two percent lower (369 points) to 20,310, one day after the central bank there announced the sale $2.5 billion in reserves to boost the falling peso. Mexico's government has also announced a $4.3-billion emergency rescue plan to inject funds into the economy.

Markets in Argentina, Chile and Colombia also lost value Thursday.

Latin American currencies have fallen on investor fears of a global recession that would reduce demand for the region's commodities such as metals and agricultural goods.

U.S. Commerce Secretary Robert Gutierrez said Latin American countries feeling the impact of the global financial crisis should continue to engage in trade and not revert to protectionist policies.

Gutierrez made the comment Thursday during a speech before the American Chamber of Commerce in Rio de Janeiro, Brazil. He said trade is essential and that nations with open economies would pull out of the crisis faster.

The Commerce Secretary also said that during the Great Depression, the United States made the mistake of raising taxes and raising trade barriers, which he said sparked retaliation from other countries and made the economic situation worse.

Some information for this report was provided by AFP and AP.

XS
SM
MD
LG