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EMERGING MARKETS-Most Latam currencies, stocks slide on Russia sanctions concerns

April 6, 2022By Reuters

Updates; adds comments, details

By Shreyashi Sanyal and Anisha Sircar

Most Latin American currencies and stocks fell on Tuesday, taking cues from broader emerging markets on concerns of another round of harsh Western sanctions on Russia.

Markets across the globe were pressured after the European Union’s executive proposed new sanctions against Russia, including a ban on coal imports, with ally United States also preparing to ramp up its sanctions against Moscow.

Russia’s benchmark MOEX stock index .IMOEX and the dollar-denominated RTS index .IRTS fell 4.5% each, snapping a four- and five-day winning streak, respectively.

Market volatility is back to levels experienced when the pandemic first began, with doubts over the length and damage of Russia’s war on Ukraine,” said Juan Perez, director of trading at Monex USA.

The Mexican peso MXN= saw the slimmest losses on the day among regional peers, declining 0.8%. President Andres Manuel Lopez Obrador is poised for victory in a referendum on his rule on April 10.

“President Obrador is likely to remain in power after a recall referendum on his position this Sunday, which may embolden him to double down on his interventionist agenda,” said Nikhil Sanghani, EM economist at Capital Economics.

“While a radical shift in policymaking is unlikely, the prospect of market-unfriendly policies alongside further fiscal austerity will weigh on Mexico’s longer-term growth prospects.”

The currency has been hovering at its strongest levels since July 2021 following the central bank’s seventh interest rate hike in a row in late March.

The MSCI’s gauge for Latam currencies .MILA00000CUS fell 1%, but hovered near two-year highs. Currencies in the region have widely outpaced their EM peers, led by higher commodity prices and central bank tightening.

In fact, while EMs suffered their first portfolio outflows in a year in March, regionally, Latam saw a net inflow of $10.8 billion, the biggest inflow for the region since July, a report by the Institute of International Finance showed.

Brazil’s real BRBY, BRL= fell 1.3% against the dollar, retreating from the 25-month high hit in the previous session.

Peru’s sol PEN= shed 1.8% to lead declines in the region after President Pedro Castillo imposed a curfew in the capital, Lima, in an attempt to restrict protests against rising fuel and fertilizer costs that have spread throughout the country.

The Colombian COP= and Chilean CLP= currencies dropped 1% each.

Chile’s government will hold a plebiscite for a new constitution on Sept. 4, the government said. nC0N2VI02T

Latin American stocks .MILA00000PUS plunged 2.6% to track their worst day in nearly four months, with Sao Paulo stocks .BVSP dipping 1.6%.

Meanwhile, in an adverse scenario due to the war in Ukraine, sovereign ratings in Emerging Europe, Sub-Saharan Africa and Asia Pacific could see numerous outlook and rating changes, Fitch Ratings said in a new report.

Key Latin American stock indexes and currencies at 1920 GMT:

Stock indexes


Daily % change

MSCI Emerging Markets .MSCIEF






Brazil Bovespa .BVSP



Mexico IPC .MXX






Argentina MerVal .MERV








Daily % change

Brazil real BRBY



Mexico peso MXN=D2



Chile peso CLP=CL



Colombia peso COP=



Peru sol PEN=PE



Argentina peso (interbank) ARS=RASL



Argentina peso (parallel) ARSB=



(Reporting by Shreyashi Sanyal and Anisha Sircar in Bengaluru
Editing by Paul Simao and Marguerita Choy)

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