LatAm | Strong Dollar — Spanish Risk

The current geoeconomic situation is subject to a phase of exchange rate volatility marked by the persistent strength of the US dollar against major Latin American currencies.

October 02, 2026  |  4 min read

In this scenario, the International Monetary Fund has projected a moderate global growth of 3.0% for the 2026 fiscal year, a figure that reflects the persistence of restrictive financial conditions and a reconfiguration of capital flows toward safe-haven assets in the face of regulatory and trade uncertainty in advanced economies. This risk-aversion environment has been intensified by geopolitical tensions in the Middle East and Southeast Asia, factors that consolidate the greenback’s position as the predominant reserve asset.

The accelerated depreciation of benchmark currencies such as the Mexican peso, the Brazilian real, the Chilean peso, and the Colombian peso is largely a response to the expectation of expansive tariff and fiscal policies in the United States, which has generated a notable increase in external financing costs in the region. This phenomenon not only affects the payment capacity of sovereign issuers but also shifts additional inflationary pressure through the rising cost of imports. Consequently, Latin American central banks are forced to consider a tightening of their monetary policies to mitigate capital flight, which conditions internal economic dynamism and projections for foreign direct investment profitability.

Persistence of Asymmetries and Regulatory Sovereignty

The current geoeconomic shift toward a robust dollar represents a turning point that tests the strategic autonomy of Latin American economies and the resilience of the balance sheets of Spanish multinationals. The relevance of this phenomenon resides in its capacity to alter cost structures and income predictability in markets that are fundamental to the Spanish external sector. This is not an ordinary cyclical oscillation; rather, an underlying trend is evidenced, linked to the divergence of monetary policies and the fragmentation of global trade, where the dollar acts as a transmission mechanism for US political uncertainty toward emerging economies.

For Spain, whose presence in Ibero-America is a pillar of its international economic projection, this dynamic introduces a structural vulnerability in the income statements of its largest corporations. The depreciation of local currencies against the US currency, which often acts as a benchmark for debt and technical inputs, generates a pincer effect on operating margins. It must be considered that the region faces the challenge of balancing the need for infrastructure investment and energy transition with debt servicing that is increasingly onerous in local currency terms, which could lead to a slowdown in public tenders and corporate expansion plans.

Operational and Financial Challenges for Spanish Capital

The most immediate impact for the Spanish business fabric is manifested in the banking sector, where exposure to Mexico and Brazil is particularly significant. The strength of the dollar increases the risk of a rise in non-performing loans for corporate credits denominated in foreign currency, while the conversion of local profits to euros is penalized by unfavorable exchange rates. In the field of infrastructure and regulated services, there is an evident risk of mismatch between tariffs collected in local currency and debt obligations contracted for the financing of long-term projects, which requires extremely sophisticated treasury management and the use of high-cost currency hedging instruments.

The agro-industrial sector and tourism present an ambivalent case that warrants rigorous analysis. In the former, while revenues from dollar-denominated exports favor the competitiveness of regional producers, the rising cost of inputs and energy partially neutralizes these benefits. In terms of tourism, the attractiveness of more competitive local prices for international travelers is offset by the rise in air transport costs, also linked to the valuation of the US currency. This complexity forces Spanish subsidiaries to review their transfer pricing policies and prioritize obtaining financing in local currency or in euros to shield their balance sheets against the volatility of the greenback.

Given the possibility of an adverse scenario that includes restrictions on capital repatriation in countries with critical foreign exchange reserves, the strategy of Spanish companies must pivot toward the consolidation of liquidity and the optimization of capital structures. Evidence points to the fact that those companies that manage to migrate their financial obligations toward instruments decoupled from the dollar will be in a position of competitive advantage. Likewise, the ability of corporations to pass through cost inflation to final prices will be a determining factor of their resilience in an environment where local purchasing power is diminished by currency devaluation.

Tracking Milestones in the Financial Agenda

• December 31, 2026: End of the fiscal year and earnings reports. Key moment to evaluate the real impact of currency conversion on the consolidated results of Ibex 35 companies.
• First quarter of 2027: Review of the IMF growth outlook. The update of projections will confirm if global growth reaches the predicted 3.4%.
• US Legislative Session Period: Implementation of new tariff policies. Any progress in the protectionist agenda will act as a catalyst for greater dollar appreciation.