Economics
Latin American Central Banks Dodged FX Crisis, Carstens Says
- Region was right in hiking interest rates early, BIS head says
- Policy makers would face a much harder job now without hikes
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Aggressive interest rate hikes by Latin America’s central banks since last year helped to prevent a currency crisis and tamed some of the inflationary pressure in the region, according to Agustin Carstens, the head of the Bank for International Settlements.
The monetary policy tightening delivered by the region’s central banks helped to contain the sudden depreciation in exchange rates seen during past episodes of sustained interest rate increases from the US Federal Reserve, Carstens, a former governor of Mexico’s central bank, said.