How exchange rate policies and systems characterize South American countries: The exchange rate plays a key role in the development of the South American economy . The exchange rate has greatly influenced the economy of these regions, particularly from the 1960s, when the economy was mainly characterized by import substitution, and the 1970s, when external debt increased significantly. The exchange rate has played a very determining role in the formulation of government policies in these regions. In fact, "many analysts view exchange rate policy as a major determinant of other economic outcomes, such as adjustment to the oil shocks of the 1970s and the debt crisis of the 1980s" (Frieden and Ernesto , 2010). There are four main categories of exchange rate regimes in Latin America, as Kiguel Alberto explains: (i) countries with fixed exchange rates where devaluations are a rare event (e.g. Venezuela until 1982), (ii ) countries with fixed exchange rates but with periodic devaluations. (for example Chile, Colombia, Peru and Uruguay in the 50s and 60s), (iii) countries with pronounced decentralization (the famous Tablitas at the end of the 70s in the southern cone and the rate rule exchange rate in Mexico more recently), (iv) countries with a passive crawling parity (Brazil between 1968 and 1986, Colombia since 1967), (v) countries which adopted a flexible exchange rate for a short period (for example the Venezuela in 1989 and Peru in 1990). (1992, p. 6) Regimes have varied over time, moving from fixed exchange rates (with periodic devaluations) to more flexible exchange rates (where a moving parity was adopted) and later, to maximum devaluations. More recently, the exchange rate has returned to a more stable outlook. In line with the exchange rate...... middle of document...... fiscal instability could continue to harm the economy.References1. Darrat, F. Elkhal, K. and Hakim, S. (2000). On the integration of emerging stock markets in the Middle East. Journal of Economic Development. 25, 2-17.2. Gellati, M. A wavelet analysis of MENA stock markets. JOURNAL OF RESEARCH WORKING PAPERS 596, 4-9.3. Frieden, L and Ernesto, P. 2010. (2009). Preliminary Overview of the Economies of Latin America and the Caribbean 2008. United Nations Publications.4. Hall, M. (2005). Foreign exchange crises in developing countries: the political role of the banking sector. Ashgate Publishing, Ltd5. Khan, M and Reinhart, C. (1995). Capital flows in the APEC region. Occasional Paper (International Monetary Fund), 122, 803-809.6. Kiguel, A. (1992). Policy Research Working Papers. Policy Research Working Papers: Macroeconomic Adjustment and Growth, 880, 78-79.