Factoring Exchange Rate Policy into your Investment Strategy – Risks Facing Andean Countries

by Dr. Eliot Kalter

Dr. Eliot Kalter’s Presentation in October, 2011 outlines the implications of surging capital inflows and the difficult policy choices they present to sovereign investors in the Latin American Andean region.

Table of Contents:

I. Capital Inflows Have Reached Pre‐Crisis Levels in Latin America

II. Strong Capital Inflows, High Real Exchange Rates and Fast Credit Growth

III. Surge in Capital Inflows Requires Difficult Policy Choices to Reduce Risks

IV. Exploring the Current Policy Mix to Curb Currency Appreciation: Where Are We Now?

V. Should Investors Be Concerned about Wrong Policy Choices?

VI. The Bottom Line

Factoring Exchange Rate Policy into your Investment Strategy – Risks Facing Andean Countries