RIO DE JANEIRO, March 16 (Xinhua) -- The U.S. Federal Reserve's decision to raise benchmark interest rate by a quarter of a percentage point will have limited impact on Latin American economies.
Analysts in Brazil, Mexico and Argentina agree the impact will be minimal.
The increase, from 0.75 percent to one percent, "had its impact ... even before it happened," in part because "they were already expecting it," Alberto Pfeifer from the Institute for Higher Studies at the University of Sao Paulo (USP), told Xinhua in a recent interview.
While Brazil's Sao Paulo Stock Exchange and national currency both rebounded on the news, Pfeifer said that had more to do with "domestic matters" than "cause and effect."
"Certain doubts remain" about whether U.S. interest rates will continue to rise over the coming months, he said.
That decision would depend on the unemployment rate and, above all, fiscal reforms in the corporate sector, which both U.S. President Donald Trump and congressional House Speaker Paul Ryan are eager to implement to reduce the tax burden on corporations from 35 percent to 20 percent.
According to Pfeifer, if the interest rate remains on the rise, the medium-term "risk" for Brazil is that its large pension funds, which operate under strict regulations, "could migrate" to the U.S. market to take advantage of the increase.
Brazil could, of course, counter that trend "by deepening reforms" which the current government is undertaking.
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