Abstract

MENDOZA-RIVERA, Ricardo J.; LOZANO-DIEZ, José Antonio  and  VENEGAS-MARTINEZ, Francisco. Impact of the Covid-19 Pandemic on Relevant Financial Variables in Major Latin American Economies. Econ: teor. práct [online]. 2020, n.spe5, pp.125-144.  Epub July 30, 2021. ISSN 2448-7481.  https://doi.org/10.24275/etypuam/ne/e052020/mendoza.

Objective: This paper examines the effect of the Covid-19 pandemic, measured by the mortality rate (ratio of deaths and confirmed infections), on stock indices, exchange rates and interest rates in major economies in Latin America, specifically Mexico, Brazil, Chile, Colombia, Argentina and Peru. These economies are not only the largest, but also the most affected by the Covid-19 pandemic. Methodology: Various panel data models are used with daily data (February-June, 2020). Results: The main empirical findings are that the mortality rate negatively impacts stock indices and interest rates, yet has no effect on exchange rates. The exchange rate may, therefore, be affected by other types of risks, such as uncertainty in the US economic policy.

Keywords : Stock markets; exchange rates; interest rates; panel data models; Covid-19.