Despite falling back a little over the past few weeks, the strength of the US dollar has rekindled fears in Latin America of a re-run of the economic crises that swept across the region in the 1980s and 1990s. For our part, we think that the worst of these fears are overdone. Dollar debt burdens are much lower than they have been in the past, and countries appear to have learned their lessons from previous crises. Nonetheless, we do think that the recent currency rout makes further policy easing this year unlikely, despite the weakness of growth.
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