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

WHO: Anti-Ebola Efforts Should Focus on West Africa

Official says WHO is 'reasonably confident' countries bordering those hardest hit by the Ebola outbreak are not seeing the virus crossing their borders More

South Sudan Crisis Threatens Development

Economic costs and lost development opportunities in South Sudan have erased what little progress the country has made since independence in 2011 More

Ukrainian PM Warns: Russia May Try to Disrupt Sunday Poll

Arseniy Yatsenyuk orders full security mobilization for parliamentary election to prevent ‘terrorist acts’ from being carried out More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
After Decades of Pressure, Luxembourg Drops Bank Secrecy Rulesi
X
October 21, 2014 12:20 AM
European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.
Video

Video Young Nairobi Tech Innovator on 'Track' in Security Business

A 24-year-old technology innovator in Nairobi has invented a tracking device that monitors and secures cars. He has also come up with what he claims is the most robust audio-visual surveillance system yet. As Lenny Ruvaga reports from the Kenyan capital, his innovations are offering alternative security solutions.
Video

Video Latinas Converting to Islam for Identity, Structure

Latinos are one of the fastest growing groups in the Muslim religion. According to the Pew Research Center, about 6 percent of American Muslims are Latino. And a little more than half of new converts are female. VOA’s Carolyn Presutti travelled to Miami, Florida -- where two out of every three residents is Hispanic -- to learn more.
Video

Video Exclusive: American Joins Kurds' Anti-IS Fight

The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video South Korea Confronts Violence Within Military Ranks

Every able-bodied South Korean male between 18 and 35 must serve for 21 to 36 months in the country’s armed forces, depending upon the specific branch. For many, service is a rite of passage to manhood. But there are growing concerns that bullying and violence come along with the tradition. Reporter Jason Strother has more from Seoul.
Video

Video North Carolina Emerges as Key Election Battleground

U.S. congressional midterm elections will be held on November 4th and most political analysts give Republicans an excellent chance to win a majority in the U.S. Senate, which Democrats now control. So what are the issues driving voters in this congressional election year? VOA National Correspondent Jim Malone traveled to North Carolina, one of the most politically competitive states in the country, to find out.
Video

Video Comanche People Maintain Pride in Their Heritage

The Comanche (Indian nation) once were called the “Lords of the Plains,” with an empire that included half the land area of current day Texas, large parts of Oklahoma, New Mexico, Kansas and Colorado.The fierceness and battle prowess of these warriors on horseback delayed the settlement of most of West Texas for four decades. VOA’s Greg Flakus reports from Lawton, Oklahoma, that while their warrior days are over, the 15,000 members of the Comanche Nation remain a proud people.
Video

Video Turkey Campus Attacks Raise Islamic Radicalization Fears

Concerns are growing in Turkey of Islamic radicalization at some universities, after clashes between supporters of the jihadist group Islamic State (IS) or ISIS, and those opposed to the extremists. Pro-jihadist literature is on sale openly on the streets of Istanbul. Critics accuse the government of turning a blind eye to radicalism at home, while Kurds accuse the president of supporting IS - a charge strongly denied. Henry Ridgwell reports from London.

All About America

AppleAndroid

More Americas News

Canadian Shooter's Mother ‘Mad’ at Son

Susan Bibeau told the Associated Press that part of her "wants to hate" estranged son Michael, who killed a soldier in Ottawa
More

Canadian Couple Accused of Spying in China Held in Near Isolation

Treatment of the couple, who are being held without charge at a remote facility in the border city of Dandong, has seriously strained China's ties with Canada
More

Mexico Governor Resigns After Student Disappearances

Students from a rural teachers training college went missing after a confrontation with police in the town of Iguala on September 26
More

World's Highest Ice Age Settlements Discovered

The settlements, 4.5 km above sea level in the southern Peruvian Andes, were inhabited at least 12,000 years ago
More

Haiti Cholera Victims Seek Damages from UN in US Court

Plaintiffs blame a contingent of Nepalese peacekeepers for bringing disease to their nation after 2010 earthquake
More

Video Canada Capital Tense as Parliament Reopens

PM Harper says Wednesday's shooting, along with another incident this week that led to a soldier's death, are grim reminders that Canada is not immune to terrorism
More