The economic rise of Latin America?
Latin America is experiencing a unique economic situation during the ongoing oil war, as its sovereign bonds remain stable despite global financial turmoil. This stability is attributed to the region's structural advantages, including borrowing in local currencies and being net commodity exporters. Unlike past crises, Latin American countries are now better positioned to manage their debts and benefit from rising commodity prices.
- ▪Latin American sovereign bonds have not been affected by the recent surge in the dollar.
- ▪Brazil issues 96 percent of its sovereign debt in reals, while Mexico issues over 80 percent in pesos.
- ▪In the first quarter of 2026, Brazilian local bonds returned 7.3 percent in dollar terms, outperforming other emerging markets.
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The economic rise of Latin America? by Tyler Cowen April 29, 2026 at 12:26 am in Current Affairs Economics When the world goes looking for shelter during an oil war, the destinations are predictable: the dollar, gold, short-term Treasuries. Nobody puts Latin American sovereign bonds on that list. Yet as the dollar surged in March, the region’s average sovereign spread didn’t move. There was no contagion. The reason is structural, not lucky: as net commodity exporters borrowing in their own currencies, these governments earned more dollars from the crisis than they owed. This reflects, too, the shift in borrowing profile. Brazil issues 96 per cent of its sovereign debt in reals, for example. Mexico, more than 80 per cent in pesos.
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Excerpt limited to ~120 words for fair-use compliance. The full article is at Marginal Revolution.
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