Argentina's latest monetary ailment may prove contagious for some of its Latin American neighbors, with Brazil likely to be the first to catch the fever.
"What has been happening in Argentina will have a negative impact on the Brazilian economy," Tony Volpon, a strategist for Latin America at Nomura, told CNBC, citing long-standing trade ties. "For example, about 70-80 percent of Brazilian car exports actually go to Argentina. So they are vulnerable."
Argentina surprised the market last week by suddenly relaxing its currency controls, which have been blamed, at least in part, for spurring high inflation and a sharp drop in its currency by sparking black market demand for dollars. The country's peso is down more than 20 percent against the U.S. dollar since the start of the year. Many analysts view the country's policy response as worsening the crisis.
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"We're in a classical kind of devaluation scenario," Volpon said. "They devalued the peso to eight (against the U.S. dollar). Now, they're trying to hold it at that level through intervention. Pretty soon there'll be a lot of pressure and they'll have to devalue again. That'll feed back into inflation and it just becomes a spiral," he added.