Latin American Currency Roundup: Political Risks To Undermine Regional FX, Though Rate Hikes Will Provide Support In 2022

• Fitch Solutions remains neutral on Latin American currency as political uncertainty and declining investor appetite for risk assets will largely offset the cycle of monetary policy tightening being carried out by regional central banks. 
• In the longer term, Fitch expects continued monetary policy tightening, relatively attractive valuations, and stabilising growth to support demand for Latin American currencies as political risks fade. 
• Within the region, Fitch is most bullish on the Peruvian sol and Chilean peso, while it expects the Argentine peso will continue depreciating as elevated inflation persists.

(Source: Fitch Solutions)