Joining the party

Latin America's inflation markets are becoming more liquid, with some countries relaxing regulations to spur growth. This has prompted a number of overseas dealers and investors to enter the arena, with most predicting further growth in the coming year. By Duncan Wood

Last February, Brazil's famous carnival more or less coincided with a decision by Brazil's government to remove the 15% withholding tax that had deterred investors from buying domestic inflation-linked bonds. The celebration ignited by that decision may have featured rather more sober pinstripes and fewer feathered dancers than Rio de Janeiro's four-day street party, but it has also outlasted the carnival, welcoming eager investors to both cash and derivatives markets throughout the year.

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