10/08/2013 04:53 pm ET

U.S. Government Shutdown Affects Latin American Economies


As the partial shutdown of the United States government limps into a second week, its effects are being felt not just at home but across the globe. In Latin America, currencies have swung up and down with economists and analysts keeping close watch on the action in Congress for its immediate and long-term impact on the region.

The two largest economies in Latin America, Brazil and Mexico, saw their economies rise and fall respectively in the wake of the U.S. government shutdown and, next up, possibly defaulting due the debt limit impasse. The Mexican peso plummeted to a monthly low because of concerns over demand in the U.S. for Mexican products, while Brazil’s real currency shot up because of speculation that the shutdown would delay the U.S. Federal Reserve’s stimulus program that injected cheap U.S. cash into emerging markets throughout the world.

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