Latin American markets fall as commodity prices decline
Latin American markets were trading lower on July 21—taking cues from a fall in commodity prices globally. Crude prices continued a declining trend on Thursday as the oil inventory report by the US signaled a slowdown in the demand for crude. The gasoline stock inventory increased by 911,000 barrels in the week ending July 15.
Among the Latin American indexes, the Brazilian BM&F Bovespa SA Index and the Mexican IPC Index fell by 0.41% and 0.23%, respectively, on July 21 at 3 PM EST. Lower demand for crude in the US drove the negative sentiment in the Colombian COLCAP Index—it fell by 0.82%. Colombia depends heavily on crude oil prices. Crude prices directly impact its export revenues. The Argentina Merval Index was trading lower by 0.69%, while the Chilean IPSA Select Index rose by 0.12% on July 21 at 3 PM EST.
Brazilian central bank kept rates unchanged
Brazil’s central bank kept interest rates unchanged at 14.3% in the monetary policy meeting on Thursday. A deep recession in the Latin American economy combined with high inflation levels contributed to keeping the rates constant. While the primary credit rating agencies downgraded the rating for Brazil to “junk” status, the new central bank governor assigned “high priority” to control spiraling consumer prices. The inflation rate forecast for this year stands at 6.9%, while it’s 4.7% for 2017.