ABOUT US  |  INDUSTRY PRACTICES  |  SERVICES  |  PRESS ROOM

Little press attention has been given to the 1999 floating of the Brazilian, Chilean and Colombian currencies. Add these to Mexico’s Peso, which floated in 1995 and the result is that 69% of the region’s economy is measured by floating currencies. If we also consider that Argentina’s currency is pegged to the US dollar, Panama’s is dollarized and Ecuador has announced its desire to dollarized, then a total of 87% of the region’s currencies (based on GDP weighting) are either at the mercy of the market or that of an autonomous currency board. More important, the governments of these countries, at least in theory, no longer can manipulate the value of their currencies. Thus, today’s political incumbents have been stripped of a powerful weapon, traditionally used to delay necessary devaluations or artificially boost purchasing power in advance of elections.