Brazil’s top decision-maker on currency intervention signaled he wouldn’t pull the trigger on any move to stem this year’s rout in the real without obtaining full support from the central bank board, Bloomberg News reported. Gabriel Galipolo told investors in private meetings this month he would seek consensus from fellow bank directors before taking action in the foreign exchange market, according to four participants of those gatherings.
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A former executive of Brazilian retailer Americanas accused of connection with an alleged billion-dollar accounting fraud landed at an airport in Sao Paulo on Monday and handed over her passport to the country's federal police, Reuters reported. Anna Saicali was one of the main targets of raids launched by Brazil's police last week as part of their probe into the 25.3 billion-real ($4.53 billion) accounting scandal that led Americanas to file for bankruptcy in January 2023. A court in Rio de Janeiro ordered Saicali's arrest while the former executive was abroad.
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.
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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%.
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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.
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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.
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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.
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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.
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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.
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Creditors of Brazilian electric utility Light on Wednesday approved the firm's restructuring plan, which includes a capital injection of up to 1.5 billion reais ($288.33 million), the company said, Reuters reported. Light, which operates Rio de Janeiro's power service, filed for bankruptcy last year, with its debt totaling 11 billion reais. As part of the proposed restructuring, Light would receive up to 1.5 billion reais in capital, including 1 billion reais from its reference shareholders, the trio of businessmen Nelson Tanure, Ronaldo Cezar Coelho and Carlos Alberto Sicupira.