Brazil

Former Americanas Chief Executive Miguel Gutierrez denies any knowledge of accounting irregularities during the two decades he was at the helm of the Brazilian retailer, he said in a letter sent to congressional investigators, Reuters reported. Gutierrez never "participated, authorized, ordered, tolerated or became aware of any act tending to manipulate the company's accounting or to enable any type of fraud", he said in the Sept. 4 letter sent to the congressional committee investigating the company's near-collapse and viewed by Reuters.

Industrial production in Brazil slipped by more than expected in July, data from government statistics agency IBGE showed on Tuesday, providing an initial sign the sector may cap economic growth in the third quarter, Reuters reported. Industry was key for the surprisingly strong growth recorded by Latin America's largest economy in the three months through June, but overall it has been stuttering this year as the sector grapples with high interest rates. In July, IBGE said, industrial output was down 0.6% from June, missing the median forecast of a 0.3% drop in a Reuters poll of economists.

Brazil has submitted a proposal to Argentina aimed at securing Chinese yuan guarantees for Brazilian exports to the neighboring country in an initiative involving state-run lender Banco do Brasil , Finance Minister Fernando Haddad said yesterday, Reuters reported. Banco do Brasil under the proposal would oversee the conversion of yuan back into Brazilian reais, based on provided guarantees, Haddad told a press conference in Johannesburg on the sidelines of the BRICS nation summit.

Brazil’s lower house of congress approved new fiscal rules on Tuesday, finalizing legislation meant to shore up public finances and assuage market concerns about President Luiz Inacio Lula da Silva’s spending plans, Bloomberg News reported. Lawmakers voted 379-64 in favor of the fiscal plan, which will be sent to Lula for his signature. The bill’s passage will pave the way for Lula’s administration to align its 2024 budget plan with the new rules.

Brazil's Finance Minister Fernando Haddad said the government was surprised by the central bank's delay in cutting interest rates, noting that there were already reasons for a reduction before the easing cycle began earlier this month, Reuters reported. In a podcast interview with journalist Reinaldo Azevedo, recorded on Friday and aired on Monday, he stressed that the strong economic performance of the first quarter was boosted by the farm sector, and said that he had been indicating a significant slowdown ahead.

Brazil's retail sales ended the first half of 2023 in positive territory when compared with the previous year but saw its expansion lose steam since January as high interest rates bite Latin America's largest economy, Reuters reported. Sales came in stable in June versus the previous month, government statistics agency IBGE said on Wednesday, below expectations of a 0.4% increase from economists polled by Reuters.

Brazil’s central bank said a faster pace of interest rate cuts is unlikely after it kicked off an easing cycle with a bigger-than-expected reduction of 50 basis points, Bloomberg News reported. “The Committee judges that there is low probability of an additional intensification in the pace of adjustment,” central bankers wrote in the minutes of their Aug. 1-2 meeting published on Tuesday.

Brazil analysts cut their interest rate forecasts for this year and next after central bankers launched a monetary easing cycle with a bold half-a-percentage point cut last week, Bloomberg News reported. The benchmark Selic will fall to 11.75% by December, down from the prior estimate of 12%, according to a weekly central bank survey of economists published Monday. Analysts cut their key rate forecast for next year to 9%. Consumer price estimates for this year were left unchanged at 4.84%. Annual inflation will slow down to 3.88% in 2024 and 3.5% in 2025.

President Luiz Inacio Lula da Silva expects Brazil’s central bank to begin cutting interest rates on Wednesday, saying he “can only hope” that policymakers launch the easing cycle he has demanded for months, Bloomberg News reported. Analysts widely anticipate that the central bank will begin lowering the benchmark Selic from its six-year high of 13.75% when its monetary policy committee concludes its August rate decision meeting later in the day.

Brazil’s credit score was upgraded by Fitch Ratings as the emergence of a new fiscal framework stokes expectations for further reform, Bloomberg News reported. Fitch raised the South American nation’s debt rating to BB from BB- on Wednesday, putting it two notches below investment grade and on par with Guatemala and Vietnam. The outlook is stable. “Brazil has achieved progress on important reforms to address economic and fiscal challenges,” analysts including Todd Martinez and Shelly Shetty wrote in a statement.