Brazil

Brazil’s central bank lifted its key interest rate by one percentage point and surprised investors by promising two more hikes of the same size, its strongest move yet to recover investor confidence and tame inflation expectations that have been propelled by public spending and a hot economy, Bloomberg News reported. Board members boosted the Selic to 12.25% late on Wednesday as expected by 14 of 35 economists in a Bloomberg survey, with all others expecting a smaller rise.

GOL Linhas Aéreas Inteligentes S.A. and Abra Group Limited have announced a key step in GOL’s financial restructuring journey, AviationSourceNews.com reported. The airline will file an initial proposed chapter 11 reorganization plan with the U.S. Bankruptcy Court. The filing marks a critical step in addressing its financial challenges and positioning the airline for future growth. This strategic move follows a comprehensive Plan Support Agreement (PSA) signed on November 6, 2024, which involves GOL, Abra Group, their affiliated entities, and the unsecured creditors committee.

Brazil coffee exporters owned by Montesanto Tavares Group Participações SA were granted a 60-day grace period to renegotiate debt with creditors, Bloomberg News reported. The decision, seen by Bloomberg News, was issued Friday by Judge Murilo Silvio de Abreu. The judge earlier this week declined a similar request for a grace period from the two companies owned by Montesanto — Atlântica Exportação e Importação SA and Cafebras Comércio de Cafés do Brasil SA.

A Brazilian judge ruled against major coffee exporter Montesanto Tavares Group Participações SA, which has been attempting to renegotiate debt owed to banks and firms including commodities trader Cargill Inc., Bloomberg News reported. Companies owned by the coffee group — Atlântica Exportação e Importação SA and Cafebras Comércio de Cafés do Brasil SA — were denied their joint request for a 60-day grace period on debt repayment as they negotiate with creditors in order to avoid filing for bankruptcy.

InterCement Participacoes SA, the cash-strapped Brazilian cement maker, filed for bankruptcy protection at a court in São Paulo, capping months of talks with creditors after skipping debt payments, Bloomberg News reported. The filing in Brazil became “the most appropriate option” to ensure the continuity of InterCement’s restructuring efforts, the firm said in the late Tuesday filing. Its parent company Mover Participacoes and subsidiaries are also part of the request.

Brazil’s economy once again shot past expectations in the third quarter, bolstered by hefty consumer and government spending that’s fanning above-target inflation and rattling markets, Bloomberg News reported. Official data released on Tuesday showed that gross domestic product expanded 0.9% in the July-September period compared to the second quarter. The expansion came on the back of robust domestic demand that has held firm in the face of double-digit borrowing costs.

Brazil’s inflation picked up much more than expected in early November, adding urgency to government plans to cut swelling public spending that is pushing cost-of-living increases above target, Bloomberg News reported. Official data released Tuesday showed consumer prices rose 4.77% from a year earlier, above all forecasts in a Bloomberg survey of economists that had a 4.64% median estimate. On the month, they increased 0.62%. Price pressures are building in Latin America’s largest economy, stoked by a historic drought and investor anxiety over growing government spending.

The Brazilian agricultural sector experienced a significant uptick in companies seeking judicial recovery during the third quarter of 2024. This trend reflects broader economic challenges affecting various industries across the country, the Rio Times reported. According to the RGF Judicial Recovery Monitor, 264 agricultural companies were undergoing judicial recovery by the end of the third quarter, a 20.5% increase from the previous period. The surge stems from falling commodity prices, rising production costs, and high debt levels among rural producers.

Brazil’s central bank warned that additional deterioration of inflation expectations could lead to a more protracted tightening cycle, days after policymakers doubled the pace of their interest rate hikes, Bloomberg News reported. “A further deterioration in expectations could lead to a more prolonged monetary policy tightening cycle,” central bankers wrote in minutes to their Nov. 5-6 meeting, when they raised the benchmark Selic by 50 basis points to 11.25%.

Retail sales in Brazil rose less than expected in September but recovered from a fall in the previous month, as the strength of Latin America's largest economy keeps in focus amidst the central bank's fight against inflation, Reuters reported. Retail sales volumes rose 0.5% in September from August, statistics agency IBGE said on Tuesday, below the 1.10% increase forecast by economists in a Reuters poll, but above August's 0.2% decrease. Sales grew 2.1% from the year-earlier period.