(Bloomberg) — Two months into the deepest slump in decades, some of Latin America’s major economies are close to losing their main recession-fighting tool — interest rate cuts.Peru and Chile have already lowered borrowing costs almost to zero, and are being forced to consider new tactics to rescue their crashing economies. Brazil and Colombia may soon be in the same boat.The so-called liquidity trap, when monetary policy loses its traction as interest rates get close to zero, has plagued rich countries for years. Nobel-Prize winning economist Paul Krugman says it has now spread to some emerging markets as well.“There’s nothing …read more
Source:: Yahoo Finance
