Brazil

Brazilian power company Equatorial Energia SA emerged as the sole bidder to buy a key stake in Sabesp, the water utility that’s being privatized by Sao Paulo state in a multibillion-dollar share offering, Bloomberg News reported. Equatorial submitted a proposal by Wednesday’s deadline to buy a 15% stake in Cia. de Saneamento Basico do Estado de Sao Paulo, as the Brazil company is formally known, according to people with knowledge of the matter. A rival bid from a private utility backed by Singapore sovereign wealth fund GIC and Itausa SA, failed to materialize.

Brazil’s mid-month inflation slowed more than expected in early June, just as central bankers signaled they’re in no rush to resume interest rate cuts after pausing their monetary easing cycle last week, Bloomberg News reported. Official data released Wednesday showed prices increased 4.06% from a year earlier, below the 4.11% median estimate from analysts in a Bloomberg survey. Inflation stood at 0.39% on the month. Policymakers led by Roberto Campos Neto interrupted an almost yearlong cycle of rate cuts, holding the benchmark Selic steady at 10.5%.

Brazil’s central bank held its key interest rate in a unanimous vote, fueling a rally in the real as it signaled borrowing costs will be steady for a prolongued period to battle rising inflation estimates, Bloomberg News reported. Policymakers kept the benchmark Selic unchanged at 10.5% late on Wednesday, as expected by nearly all economists in a Bloomberg survey. They paused an easing cycle that had lowered rates by 3.25 percentage points. The Brazilian real gained as much as 0.9% against the dollar on Thursday morning, leading global gains.

Brazilian companies that loaded up on cheap debt are bracing for a new reality: double-digit interest rates for longer than anyone expected, Bloomberg News reported. The Central Bank of Brazil’s easing cycle appears headed for a premature end, with traders expecting it to hold the policy rate at 10.5% when it meets later Wednesday. Borrowing costs will remain above 10% for the foreseeable future, according to pricing in Brazil’s swap curve. That poses a fresh challenge to companies carrying floating-rate debt they took on when rates were around historic lows of 2% during the pandemic.

Brazil's tax authority will soon call foreign crypto exchanges not based in the country to explain their operations and how they cooperate with local service providers, government officials told Reuters on Monday. The tax revenue service is expected to publish this week an ordinance summoning these companies for further information. Unlike exchanges formally established in Brazil, they are not obligated to report transactions conducted on their platforms. "It's an area of concern for us to understand first how they operate here, whether there's any illegality or not.

Brazil’s central bank is facing an emergency of its own making that threatens to sabotage years of deft policy making and credibility gains, Bloomberg News reported. Inflation forecasts are above the 3% target into the foreseeable future and confidence is crumbling as markets question whether the central bank — or the presidency — is commanding monetary policy. It’s a devastating reversal for an institution that was lauded for its fast action against a post-pandemic price surge and subsequent rate cuts that were months ahead of developed economies.

Brazilian airline Gol announced on Friday that its board elected Eduardo Gotilla as its new chief financial officer, while also posting preliminary results for April including net debt of $4.5 billion as part of the carrier’s ongoing bankruptcy proceedings, Reuters reported. Gotilla was the CFO of power company Light through last January.

Consumer prices in Brazil rose less than expected in the month to mid-May, data from statistics agency IBGE showed on Tuesday, as the impact on food inflation from recent floods turned out to be lighter than initially feared, Reuters reported. The latest inflation reading, economists say, might ease pressure on the central bank to halt its ongoing monetary easing cycle. Prices as measured by the IPCA-15 index were up 0.44% in the period, IBGE said, picking up from 0.21% in April but below the 0.48% rise expected by economists polled by Reuters.

Brazilian airline Gol expects its exit of chapter 11 bankruptcy proceedings to involve a $1.5 billion capital injection through the issuance of new shares and refinancing of $2 billion in debt, it said in a securities filing on Monday, Reuters reported. Gol, one of Brazil's largest carriers, filed for bankruptcy protection in the United States earlier this year after struggling with heavy debt and delayed deliveries from planemaker Boeing.