Many countries in the region, for example Brazil, have taken advantage of the changed environment and have systematically made their debt stock less vulnerable to exchange rate and interest rate movements (e.g. through changing the denomination and by issuing longer term fixed-rate debt). Favourable market developments have contributed to strengthening of external positions.
Helped by higher commodity prices and generally buoyant demand for exports, current accounts have swung into surplus in many countries in the region. Appreciation of domestic currencies vis-à-vis the US dollar has further supported reduction in external indebtedness. However, despite these advances, some clear vulnerabilities remain.