This event will be simultaneously broadcast in English and Spanish.
The recent episode of high inflation has become a source of concern for policymakers in Latin America. This is a region where periods of high inflation or even hyperinflation were accompanied by deep recessions and a sharp deterioration in social indicators, such as poverty levels and income distribution.
Central banks in the region have quickly reacted by increasing the monetary policy rate. However, this is happening at a time of significant deterioration in investors’ risk perception and large volatility of capital flows, which are hurting the region’s growth prospects. Managing monetary policy in this context is particularly challenging: raising rates too little or for a short period of time might not be sufficient to control inflation. Raising rates too much may aggravate the recessionary pressures already in place.
The Latin American Committee on Macroeconomic and Financial Issues (CLAAF) will discuss this and other related crucial issues including:
- What is the role of external versus local factors in explaining inflation in the region?
- Do Latin American central banks have the appropriate tools—especially, organizational tools in case of emergency—to win the battle against inflation? How to avoid policy mistakes?
- How will the region perform in a world of higher interest rates and less appetite for Latin American debt?
- What is the role of multilateral organizations in supporting the region and other emerging markets in the new environment? Are there innovative financing tools that multilaterals can offer at the present juncture?