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By Erik Norland
The coronavirus pandemic has disrupted economies worldwide, including the United States, albeit in varying degrees. GDP contracted across Latin America, with Chile, Colombia and Mexico being hit harder than Brazil, or for that matter, the U.S. Although Brazil’s economic activity didn’t fall as much as some of its neighbors, it has been the laggard in the wake of its 2015-16 recession (Figure 1).
Figure 1: The pandemic disrupted economies across the Americas in 2020
All four of the free-floating LATAM currencies (of Brazil, Mexico, Chile and Colombia) fell sharply versus the U.S. dollar in the early stages of the pandemic. Since then, the Mexican peso (MXN), Chilean peso (CLP) and Colombian peso (COP) have rebounded. The Brazilian real (BRL) remains weak (Figure 2).