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LatAm Weekly

Chile and Brazil Growth Heralds Tightening to Come

EXECUTIVE SUMMARY

In Brazil, GDP growth surprised to the upside in Q1 2010. With inflation expectations stabilizing at a high level, this outcome suggests the central bank will raise rates by 75 bps to 10.5% at the June 9 meeting. In Argentina, authorities announced additional restrictions on FX rules, likely in an effort to contain the increasing risk of capital flight. Meanwhile, economic activity and inflation dynamics in Chile suggest that the central bank will most likely initiate the tightening cycle at the June 15 meeting. In Colombia, inflation surprised to the downside,[...]

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