... more on Latin America
YOU WANT HIGH returns with little to no risk? It’s easy. Just buy Brazilian reais. Overnight interest rates are north of 17% and the currency only ever seems to get stronger. If you’re a dollar investor, you’re making high nominal returns from Brazilian domestic rates; what’s more you are getting capital gains from currency appreciation. No wonder local markets in general and Brazil’s in particular are the new hot asset class.
In emerging market trade body EMTA’s quarterly volume surveys, local-market treasury instruments consistently account for roughly half of the total volume in emerging market debt. That’s up from 19% in 1994 and 35% in 2000, and means that every year banks trade more than $2.5 trillion in Brazilian reais, Mexican pesos, Polish zlotys and other formerly exotic currencies, much of it being sold...
