Guerra de Divisas…como afecta a latinoamérica…

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Desde el Financial Times (usar la herramienta de traducción para este artículo)

Latin America is going Brazilian. Previously, it was only Brazil, the region’s biggest economy, that complained about the competitive devaluations generated by money-printing in the west, the so-called currency wars.

Now, however, as Japan joins the rush to print money and devalue, the more orthodox and free-trading Latin economies – investor darlings such as Mexico, Chile, Colombia and Peru – also fear catching a bullet. The issue may well dominate this week’s G20 meeting in Moscow, given that Asian exporters such as South Korea are also worried about currency appreciation.

“Not all Latin American policy makers have used the term currency war,” says Luis Oganes, head of Latin America research at JPMorgan. But they “are expressing increasing concern and reacting to it”.

Last week, Felipe Larraín, Chile’s finance minister, lamented that competitive devaluations of global currencies from quantitative easing, or QE, could lead “to new forms of trade protectionism”.

Agustín Carstens, the head of Mexico’s central bank, warned the following day that massive cross-border capital flows could lead to a “perfect storm” of economic problems. He added that “concerns of asset-price bubbles fed by credit booms are starting to reappear”.

Symptomatic of this was a tweet last Tuesday by Bill Gross, the co-chief investment officer of Pimco, the bond fund, which praised the Mexican peso as a “great currency” and that led an almost 1 percentage point jump in the currency. Such concerns are the opposite of those in more mismanaged Latin economies, such as Venezuela, which devalued on Friday, or Argentina, both of which are suffering capital outflows.

What makes this round of currency war complaints different from when Brazil coined the phrase in 2010, is that after years of orthodox policy making the Mexican, Colombian, Peruvian and Chilean economies, which have a combined economic output of $2.1tn, enjoy lower inflation and interest rates, and smaller budget deficits. And yet they are still suffering.

“The term ‘currency wars’ is often used as a scapegoat by policy makers,” says Michael Henderson, Latin America economist at Capital Economics, a consultancy. “The fact that people such as Mexico’s Carstens are picking up on the idea lends it more credence.”

Certainly, the evidence seems clear. The Mexican, Chilean, Colombian and Peruvian currencies all appreciated by about 10 per cent against the dollar last year. The average of their inflation-adjusted, trade weighted currencies is now also 8 per cent above the 10-year average.

This has prompted howls of protest from local exporters, and increased pressure on politicians to “do something” to help.

In depth

Currency wars

Unilateral currency interventions and covert manipulation for competitive advantage threaten to raise political tensions

“We firmly criticise the monetary policies of developed economies which are generating excessive international liquidity and overvaluing currencies such as ours,” Mauricio Cárdenas, Colombia’s finance minister, told the Financial Times.

To be sure, part of the reason for the exchange rate appreciation is that Chile, Peru and Colombia are enjoying a terms of trade boost from high commodity prices. Chile is the world’s largest copper producer, Peru the second-biggest, and Colombia the world’s fourth-biggest coal exporter.

But Mexico, where by contrast manufacturing accounts for 75 per cent of exports, also bemoans getting caught in a quantitative easing-led currency war – even as QE helps boost developed world economies and thus its own.

“The fact that emerging world exports are slowing generally has only intensified policy makers’ willingness to ‘fight’ the currency war,” says David Lubin, head of emerging markets economics at Citi.

So far, none of these countries have contemplated Brazilian-style capital controls. “I’ve never thought about capital controls. I don’t see them as necessary,” Julio Velarde, Peru’s central bank chief, said last month.

Instead, they have turned to direct currency intervention; paying down foreign debt; macro-prudential measures – such as increases in bank reserve requirements; and interest rate cuts that reduce the “carry”, or interest rate differential, for yield-hungry foreign investors.

Yet such approaches have limits, and bring their own problems. Lowering interest rates, for one, can foster credit booms – and private credit is already growing at an average of 13 per cent among the four economies, according to Capital Economics.

Faster credit growth can in turn lead to overheating – but raising interest rates to cool the economy only attracts more capital inflows.

It is an unfortunate Catch-22, with no magic formula to solve it.

“We do not like capital controls, we believe they are not effective enough,” says Mr Cárdenas, contemplating Colombia’s trade-weighted peso which is 17 per cent above its 10-year average. “But we have not scrapped the idea altogether – it is always a handy option. I even have one plan in my desk drawer.”

Additional reporting by Andres Schipani in Bogotá, Jude Webber in Santiago, and Naomi Mapstone in Lima

Lo cierto es que no es fácil combatir el problema, uno es el término de especulación generado por el diferencial de tasas, y por otro lado también la fortaleza o confianza que generan las economías de la zona respecto de los pares desarrollados (aún). El mercado de las divisas es el más gran del mundo, por mucho, y el más influyente probablemente en las decisiones económicas de un país. Un ataque a la economía como el que se refleja por la apreciación del peso y flujo de capitales ingresando pueden aniquilar a una economía en muy corto tiempo si no es tratado de manera agresiva, ya que produce el doble problema de apreciación de divisa y por lo tanto poca competitividad en las exportaciones, pero también inflación de precios internos, que en el caso particular de chile se ha volcado hacia las propiedades, pero perfectamente puede ir en búsqueda de otros bienes y servicios. El único país en mi conocimiento que logró evitar esto es Suiza, colocando un límite al franco respecto del euro, de manera sorpresiva. Fue un movimiento brillante sin duda. La diferencia es que las tasas de suiza son bajas por lo tanto el flujo de capitales por una moneda más segura era la razón principal de la apreciación, no el carry trade. Acá tenemos el doble problema de carry trade y moneda fuerte con economía creciendo. Difícil problema de hecho. Afortunadamente tenemos a los consejeros del banco central y a Vergara, en conjunto a toda la fauna de opinólogos económicos que nos pueden ayudar en esto.

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