The impact of “Brexit” in Latin American economies will be minimal

The impact of “Brexit” in Latin American economies will be minimal

13/07/2016 source “Cesla”

The direct impact of “Brexit” – the decision of the United Kingdom to leave the EU – over the economies of Latin America will likely be minimal due to limited trade links between Britain and Europe and the South American region, said last Monday the rating agency Moody’s in a report. The agency said that, except Mexico, it is unlikely that the monetary policy decisions of the Latin American countries are significantly affected by the “Brexit”.

The greatest risks related to trade stem from the possibility that the “Brexit” may produce a lower price environment of raw materials for a longer period, the report said. “The impact on the price of raw materials has contributed already to create challenging external conditions for several countries in the region,” said the analyst at Moody’s, Renzo Merino.

The said report also mentions other possible risk for the region: the uncertainty and the effect that it may have on global investment due to the risk aversion increase.