News / Americas

IMF: Latin America Facing Period of Weaker Currencies

People walk by a sign indicating the exchange rate between the Argentine peso and the U.S. dollar in Buenos Aires, Jan. 23, 2014.
People walk by a sign indicating the exchange rate between the Argentine peso and the U.S. dollar in Buenos Aires, Jan. 23, 2014.
Reuters
Latin American nations are looking ahead at a period of weaker regional currencies, while the widespread growth model based on commodities exports is nearing a “plateau”, an International Monetary Fund official said on Wednesday.
 
Cooling economic growth, rising international interest rates and softer commodities prices have combined to pressure currencies in recent months.
 
“There are differences from one economy to another, but in general the international context points to a period of weaker currencies in the region,” Alejandro Werner, the IMF's director for the Western Hemisphere Department, said at a conference in Chile.
 
Since the start of the year, Argentina's peso has fallen over 17 percent, Chile's peso close to 7.5 percent, Colombia's peso around 4 percent, and Mexico's peso and Peru's sol both about 1 percent.
 
Brazil's real has bucked the trend, appreciating about 1 percent.
 
Werner said that most Latin American countries were growing close to their trend rate and that there needed to be a concerted effort to improve productivity and promote investment, which has seen a recent sharp slide.
 
Latin American countries, which averaged economic expansion of 4.3 percent between 2004 and 2012, will likely average growth of around 3.3 percent over the next five years, he forecast.
 
“The cycle of development and growth led by exports is nearing a plateau ... the productive process needs to be fed by greater growth in productivity and investment,” said Werner.
 
The IMF official pointed to Mexican President Enrique Pena Nieto's energy reform, which ended state-owned oil company Pemex's 75-year monopoly on oil and gas production, as a prime example of what can be done to lift productivity.
 
“For many years opportunities to develop (Mexico's) energy potential weren't taken advantage of and now those doors of opportunity are being opened,” said Werner.
 
As a result of the energy overhaul, the bulk of new shale development can potentially be handled by foreign and private oil companies, although it will likely be 2015 at the earliest before Mexico's economy starts to feel any boost from the opening of the sector.
 
“There are many of these opportunities in many of the region's countries but politically speaking the fact that they haven't been taken advantage of in the past points to the trouble in taking advantage of them in the future,” Werner said.
 
In Chile, President Michelle Bachelet, who took office on March 11, has said she wants to foster investment and productivity by making sweeping changes to the country's education system, funded by a tax reform package.
 
Werner sounded a positive note on her plans, brushing aside concerns that the tax reform could hurt investment in the Andean nation just as an economic slowdown deepens.
 
“Investment will be stimulated by having a more educated workforce and to the extent that these [fiscal] resources are put into projects with a high social return, that's going to help the economy grow more,” he said.

You May Like

Multimedia In US, Decision Expected Soon in Racially Charged Case

Missouri town, many Americans on edge over whether jurors will indict white police officer in August shooting death of unarmed black teen More

Corruption Fighters Want More From World’s Strongest Nations

Anti-corruption activists say final communique fell short of expectations and failed to fully address systemic problems More

Philippines Leery of Development on Reef Reclamation in S. China Sea

Chinese land reclamation projects in area have been ongoing for years, but new satellite imagery reportedly shows China’s massive construction project More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Ukraine Marks Anniversary of Deadly 1930s Faminei
X
Daniel Schearf
November 23, 2014 4:32 PM
During a commemoration for millions who died of starvation in Ukraine in the early 1930s, President Petro Poroshenko lashed out at Soviet-era totalitarianism for causing the deaths and accused today’s Russian-backed rebels in the east of using similar tactics. VOA’s Daniel Shearf reports from Kyiv.
Video

Video Ukraine Marks Anniversary of Deadly 1930s Famine

During a commemoration for millions who died of starvation in Ukraine in the early 1930s, President Petro Poroshenko lashed out at Soviet-era totalitarianism for causing the deaths and accused today’s Russian-backed rebels in the east of using similar tactics. VOA’s Daniel Shearf reports from Kyiv.
Video

Video Hong Kong Protests at a Crossroads

New public opinion polls in Hong Kong indicate declining support for pro-democracy demonstrations after weeks of street protests. VOA’s Bill Ide in Guangzhou and Pros Laput in Hong Kong spoke with protesters and observers about whether demonstrators have been too aggressive in pushing for change.
Video

Video Law Enforcement, Activists in Ferguson Agree to Keep Peace

Authorities in Ferguson, Missouri, say they have agreed with protest leaders to maintain peace when a grand jury reaches its decision on whether to indict a white police officer in the shooting death of a black teenager. Ferguson, a suburb of St. Louis, has been the scene of intermittent violence since the August 9 shooting intensified long-simmering antagonism between the police and the African-American community. VOA's Zlatica Hoke reports.
Video

Video US Immigration Relief Imminent for Mixed-Status Families

Tens of thousands of undocumented immigrants in the Washington, D.C., area may benefit from a controversial presidential order announced this week. It's not a path to citizenship, as some activists hoped. But it will allow more immigrants who arrived as children or who have citizen children, to avoid deportation and work legally. VOA's Victoria Macchi talks with one young man who benefited from an earlier presidential order, and whose parents may now benefit after years of living in fear.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.
Video

Video Tensions Build on Korean Peninsula Amid Military Drills

It has been another tense week on the Korean peninsula as Pyongyang threatened to again test nuclear weapons while the U.S. and South Korean forces held joint military exercises in a show of force. VOA’s Brian Padden reports from the Kunsan Air Base in South Korea.
Video

Video Mama Sarah Obama Honored at UN Women’s Entrepreneurship Day

President Barack Obama's step-grandmother is in the United States to raise money to build a $12 million school and hospital center in Kogelo, Kenya, the birthplace of the president's father, Barack Obama, Sr. She was honored for her decades of work to aid poor Kenyans at a Women's Entrepreneurship Day at the United Nations.
Video

Video Gay Evangelicals Argue That Bible Does Not Condemn Homosexuality

More than 30 U.S. states now recognize same-sex marriages, and an increasing number of mainline American churches are blessing them. But evangelical church members- which account for around 30 percent of the U.S. adult population - believe the Bible unequivocally condemns homosexuality. VOA's Jerome Socolovsky reports that gay, lesbian, bisexual and transgender evangelicals are coming out. Backed by a prominent evangelical scholar, they argue that the traditional reading of the bible is wrong.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.

All About America

AppleAndroid

More Americas News

FARC Leader Faults Colombia's Suspension of Peace Talks

Guerrilla chief Rodrigo Londono says government's action violates terms of agreement that brought rebels to negotiating table
More

Video Obama's Immigration Moves Debated on TV Talk Shows

President urges Republicans to pass legislation if they dislike executive orders he issued to address status of millions of illegals in US
More

Vazquez Is Favorite to Win Uruguay Presidential Vote

Leftist ruling party candidate buoyed by widespread affection for country's outgoing leader, strong economic growth
More

Brazil's Rousseff Struggles to Limit Petrobras Scandal's Damage

President expects bribery scandal at state-run oil company to deteriorate in coming months, aides say, with arrests possible for some political allies
More

Mexico, Central America Hail Obama's Immigration Reform

Mexican leader calls US president's proposals 'most important measures taken in several decades'
More

Torturers of Chilean President's Father Sentenced to Jail

Judge sentences 2 retired colonels to prison for committing 'crime of torture resulting in the death' of Alberto Bachelet Martinez during early days of Pinochet dictatorship
More