Brazil's central bank still sees its current pace of 50-basis-point interest rate cuts per meeting as appropriate and expects it to remain in place for the next few meetings, multiple board members said on Friday, Reuters reported. Remarks from Governor Roberto Campos Neto and economic policy director Diogo Guillen came as the central bank's monetary policy committee prepares to gather for the final time this year on Dec. 12 to 13.
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Brazil
Brazil's annual inflation came in slightly above market expectations in mid-November but remained within striking distance of the top end of the central bank's target range, likely allowing it to deliver further interest rate cuts, Reuters reported. The IPCA-15 consumer price index stood at 4.84% in the year to mid-November, data from statistics agency IBGE showed on Tuesday, up from 4.82% at the end of last month and overshooting forecasts of 4.80% in a Reuters poll of economists.
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Brazilian retailer Americanas SA reached an agreement with bank creditors to overhaul some of its debt, in a key step toward eventually exiting bankruptcy protection, Bloomberg News reported. Some 11 months after sinking into a crisis due to an accounting fraud that more than doubled its debt to 42.5 billion reais ($8.7 billion), a binding agreement was signed with creditors holding more than 35% of company’s debt, excluding intercompany credits, Americanas said in a filing Monday. Other creditors also showed interest in participating on the same deal in a non-binding way, the company said.
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An accounting scandal that engulfed Americanas SA last year was deeper than the Brazilian retailer previously reported, according to long-delayed financial reports it released Thursday, Bloomberg News reported. Americanas said the size of the fraud was 25.2 billion reais ($5.2 billion) as of the end of the end of last year — about 5 billion reais more than it previously estimated. The accounting issues stemmed from supply chain financing and false advertising contracts.
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Brazil’s annual inflation rate dropped more than expected, nearing the target range after policymakers committed to maintaining their current pace of interest rate cuts for the coming months, Bloomberg News reported. Official data released Friday showed consumer prices rose 4.82% in October from a year earlier, below the 4.87% median estimate of analysts surveyed by Bloomberg. Monthly inflation hit 0.24%. The central bank is set to deliver two more half-point cuts in as many meetings and bring the benchmark Selic to 11.25% by the end of January.
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Unigel would be a step away from filing for bankruptcy and both credit agencies rating its debt obligations, Fitch and S&PL Global, have downgraded the company to the bottom notches of their rating scales, ICIS reported. On 2 October, Unigel failed to pay a coupon on a bond due in 2026, entering a 30-day grace period to negotiate with bondholders. The company said at the end of the grace period its talks with creditors were continuing, although fears about it filing for bankruptcy kept growing.
General Motors will cancel 1,245 layoffs at its factories in Sao Jose dos Campos, Sao Caetano do Sul and Mogi das Cruzes in the state of Sao Paulo, the union representing metalworkers said on Saturday, Reuters reported. The announcement was made a day after a Brazilian labor court rejected the U.S. automaker's request for an injunction to maintain the layoffs. Saving the jobs was a “historic victory” following a 13-day strike, the Sindmetal union said in a statement, adding that GM representatives will meet union leaders on Monday to confirm the decision.
Sugar mills in top supplier Brazil are set to boost production next year as companies emerging from bankruptcy begin resuming output while others invest in operations, according to a forecast by BP Bunge Bioenergia SA, Bloomberg News reported. The company, a sugar ethanol joint venture between oil major BP Plc and crop trader Bunge Ltd., expects mills in the Center-South region to produce 41.6 million tons of sugar in 2024, commercial director Ricardo Carvalho said in an interview. That is a 1.7% increase from the current harvest year, which itself is expected to be a record.
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Brazil’s annual inflation rate ticked up roughly in line with forecasts as investors expect the central bank will keep its current pace of borrowing-cost cuts at next week’s policy meeting, Bloomberg News reported. Official data released Thursday showed consumer prices rose 5.05% in mid-October from a year earlier, just above the 5.04% median estimate of analysts surveyed by Bloomberg. Monthly inflation hit 0.21%. Policymakers are holding firm to their plans and are expected to follow through with a third straight half-point cut at their Nov.
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Brazilian retailers are struggling to survive long enough to enjoy the benefit of falling interest rates, Bloomberg News reported. The companies have high debt loads, as do their customers. Competition from online retailers like Amazon.com Inc. is heating up. And refinancing debt is more expensive at home and abroad as yields rise and the market digests an accounting scandal at Americanas SA, a nearly century-old company.
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