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The most devalued currencies in Latin America in 2021

After the second year of the pandemic, many Latin economies were hit. These are the most devalued currencies in Latin America in 2021 .

Colombian banknotes on a surface

There are several measurements and each one varies in percentage and order, but the currencies that lost their value the most are always the same. Photo: Pixabay

LatinAmerican Post | Santiago Gómez Hernández

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Leer en español: Las monedas más devaluadas de Latinoamérica en 2021

At the beginning of the year, we see that several of the Latin economies experienced strong inflationary phenomena of their currencies compared to strong economies such as the United States or Europe. This inflation is not only seen in the price of imported products or that have elements from other countries, it is also seen in the weakness suffered by currencies.

There are several measurements and each one varies in percentage and order, but the currencies that lost their value the most are always the same. These are the most devalued currencies in Latin America and they will start 2022 with a red balance, according to Bloomberg.

The most devalued currency in the entire continent was the Argentine peso. The southern currency of the continent lost 14.7% of its value against the US dollar. The country is not only going through the difficulties of the pandemic, but also a difficulty in having a budget to be able to pay its external debt to the International Monetary Fund, which already has great doubts as to whether Argentina cannot pay under the estimated times.

In second place is the Peruvian sol with a loss of 12.3% of its value. The elections that the Inca country experienced in mid-2021 was one of the reasons why the currency fell with reference to the dollar.

Another currency that has fallen sharply is the Chilean peso. According to Bloomberg, the Andean currency has fallen at a rate of 11.1% since the beginning of last year. This is due to a global phenomenon in which investors have preferred to take their money to more solid economies, but also due to electoral results that have driven away this flow of international currencies.

In fourth place, it is in Colombian peso. According to the specialized media, the Colombian currency suffered historical lows against the dollar in March, this linked to the slowdown that the economy suffered due to the pandemic. The Colombian peso lost 10.6% its value with respect to the US currency (dollar) that is taken as a reference.

The group of 5 most devalued currencies in Latin America in 2021 is closed, according to ValorAnalitik, the Brazilian real with 7.67% less than its initial value in January 2021 and the Mexican peso with 3.27% of its equivalent to the dollar. Inflation rates are associated with a slow growth rate of the Gross Domestic Product, which clearly affects a slowed economy in times of COVID and prolonged lockdowns.

The surprise for many is that the Venezuelan Bolívar no longer appears in these lists. However, with a practically dollarized economy and where the Bolívar is in less and less use, it is no longer part of the studies.

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According to the figures of Steve Hanke, professor at John Hopkins University, 3 Latin American currencies are among the top 10 currencies that have lost their value the most since January 2020. The list is headed, obviously by the Venezuelan Bolívar. According to Professor Hanke, the Venezuelan banknote has lost 98.92% of its value with respect to the Dollar.

In sixth place is the Argentine peso, which has fallen by 62.25% of its price since January 1, 2020. The southern currency is only separated from the Venezuelan by the Lebanese pound, the Zimbabwe dollar, the Sudanese pound and the Syrian.

In the 10th place of the 10 currencies with the lowest value since 2020 is the Brazilian real. According to the currency observatory of Hanke and his team, the Rio banknote has fallen 29.10% against the US dollar. It only beats the 6 already mentioned, along with the Turkish Lira, the Iranian Rial, the Nigerian Naira and the Ethiopian Birr.