Latin America & the Caribbean

The contagion effect is a serious problem as a crisis in Brazil will eventually raise the risk premium of all countries in the region.

Unfortunately, the stigma [of the IMF from] the past is very much present, and countries that would be well advised to use the fund, like Brazil, probably are not doing it.

Brazil is in a trap: if they raise interest rates further, it will raise interest costs on the national debt; but if they don’t, they will lose control over inflation.