AGL 38.54 Increased By ▲ 0.97 (2.58%)
AIRLINK 129.50 Decreased By ▼ -3.00 (-2.26%)
BOP 5.61 Decreased By ▼ -0.03 (-0.53%)
CNERGY 3.86 Increased By ▲ 0.09 (2.39%)
DCL 8.73 Decreased By ▼ -0.14 (-1.58%)
DFML 41.76 Increased By ▲ 0.76 (1.85%)
DGKC 88.30 Decreased By ▼ -1.86 (-2.06%)
FCCL 35.00 Decreased By ▼ -0.08 (-0.23%)
FFBL 67.35 Increased By ▲ 0.85 (1.28%)
FFL 10.61 Increased By ▲ 0.46 (4.53%)
HUBC 108.76 Increased By ▲ 2.36 (2.22%)
HUMNL 14.66 Increased By ▲ 1.26 (9.4%)
KEL 4.75 Decreased By ▼ -0.11 (-2.26%)
KOSM 6.95 Increased By ▲ 0.10 (1.46%)
MLCF 41.65 Decreased By ▼ -0.15 (-0.36%)
NBP 59.60 Increased By ▲ 1.02 (1.74%)
OGDC 183.00 Increased By ▲ 1.75 (0.97%)
PAEL 26.25 Increased By ▲ 0.55 (2.14%)
PIBTL 5.97 Increased By ▲ 0.14 (2.4%)
PPL 146.70 Decreased By ▼ -1.70 (-1.15%)
PRL 23.61 Increased By ▲ 0.39 (1.68%)
PTC 16.56 Increased By ▲ 1.32 (8.66%)
SEARL 68.30 Decreased By ▼ -0.49 (-0.71%)
TELE 7.23 Decreased By ▼ -0.01 (-0.14%)
TOMCL 35.95 Decreased By ▼ -0.05 (-0.14%)
TPLP 7.85 Increased By ▲ 0.45 (6.08%)
TREET 14.20 Decreased By ▼ -0.04 (-0.28%)
TRG 50.45 Decreased By ▼ -0.40 (-0.79%)
UNITY 26.75 Increased By ▲ 0.35 (1.33%)
WTL 1.21 No Change ▼ 0.00 (0%)
BR100 9,806 Increased By 37.8 (0.39%)
BR30 29,678 Increased By 278.1 (0.95%)
KSE100 92,304 Increased By 366.3 (0.4%)
KSE30 28,840 Increased By 96.6 (0.34%)
Markets

Peru's sol star Latam performer this week, Chile's peso drops

  • Peru's sol up more than 4% this week
  • Chile's peso hit by political uncertainty
  • Brazil inflation outlook in doubt
Published October 15, 2021

Chile's peso slumped to a 15-month low on Friday as political uncertainty weighed, while Brazil's real rose after the central bank said inflation would likely peak this month.

Peru's sol was the biggest gainer in Latin America this week, set for its best week in more than 30 years as a more moderate turn by President Pedro Castillo boosted investor optimism.

The sol, which is set to add more than 4% this week, has posted a six-day winning streak since Castillo named more moderate officials to his cabinet, calming fears over market-unfriendly policy reforms.

Chile's peso fell as much as 0.8% to 831.9 to the dollar on Friday, its weakest since May 2020 after opposition lawmakers launched impeachment proceedings against President Sebastian Pinera over possible irregularities in the sale of a mining company.

The controversy, sparked by new details on the deal in the Pandora Papers leak, comes ahead of presidential and legislative elections in November.

Latam FX muted, Chile's peso dragged lower by copper losses

A sharp interest rate hike by the central bank earlier this week gave the peso temporary relief, as inflation also heats up in the country, but it was set to end the week in the red.

Most other Latin American currencies were muted on Friday.

Brazil's real rose 0.7% after central bank international affairs and corporate risks director Fernanda Guardado said the bank sees 12-month inflation peaking between this month and last month before subsiding towards the official target.

Guardado added that steeper interest rate hikes were not off the table but the bank was convinced that its current pace of 100 basis points at each policy meeting would bring inflation back to target next year.

Analysts shared the central bank's view on inflation having peaked, but were skeptical over the short-term outlook.

"Although inflation will likely ease in the coming months, we continue to expect an unfavourable outlook for H1/22. Against this backdrop, Banco Central will continue its tightening cycle, with rates reaching 9% in February 2022," analysts at TS Lombard wrote in a note.

Rate hikes have somewhat helped the real through volatile market conditions bought about by concerns over inflation and stretched fiscal spending.

Other Latin American economies have also been struggling with a spike in inflation, with rising oil prices adding to the pressure.

Comments

Comments are closed.