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The impact of currency devaluation in Latin America

                                    (Image source: brecorder.com)

Latin American economies are facing a rough patch at the current moment. In Brazil, for example, in the last six months the dollar has risen 18.9% against the Real. Consumer confident in Brazil is at a 5 year low. There is economic unrest in the country, which is fueling protest among the lower and middle classes. GDP is expected to growth only about 2% this year. Weakness in Brazil is not just seduced within its borders. Other Latin American countries such as Venezuela, Argentina, Chile, Peru, Colombia, and Mexico are experiencing significant pressures.

Argentina has a 23% inflation rate and the Peso has devalued against the dollar by 14.3 just in the first half of 2013. A surcharge in the black market activity is prevalent in the region at the moment. In the black market, the dollar can fetch above official government rates.