Daniel Velandia O., head of research and chief economist at Credicorp Capital in Bogotá: “In recent months, Latin American currencies have been affected by global developments, particularly the more accelerated withdrawal of monetary stimulus from the U.S. Federal Reserve, which has led to widespread strengthening of the U.S. dollar. This, jointly with increasing fears of an economic recession due to higher borrowing costs and the Russia-Ukraine conflict, has increased risk aversion in capital markets, which in turn has meant outflows from emerging economies as investors seek the greenback as a safe haven. Under this backdrop, it is common to see a greater depreciation of those currencies that have a higher beta (that is, are more sensitive to variations in global conditions), which may incorporate structural challenges on the economic side (for example, large twin deficits) as well as political uncertainty. Thus, it is not a surprise that the Brazilian real and both the Chilean and the Colombian pesos have been the most affected currencies in the last month. Importantly, these…”