Brazil

Brazil’s troubled fertilizer maker Unigel Participacoes is proposing a two-year halt to all principal and interest payments on its international bonds as it seeks to avoid a looming default, Bloomberg News reported. The company is in talks with global bondholders before the existing 30-day grace period on a $23.2 million missed interest payment expires at the end of Nov. 1. The company has $530 million in outstanding dollar notes due in 2026.

Brazil's Finance Ministry has not taken a stance on limiting installments for credit card payments, the ministry's executive secretary, Dario Durigan, said on Tuesday, Reuters reported. The central bank unveiled on Monday a proposal to card issuers and retailers, suggesting a maximum of 12 interest-free installments for credit card payments and limiting interchange fees paid by merchants to credit card issuers.

Retail sales volumes in Brazil overshoot market expectations but still posted a small decrease in August on a monthly basis, statistics agency IBGE said on Wednesday, signaling the sector remains under pressure amid high borrowing costs, Reuters reported. In Latin America's largest economy, retail sales were down 0.2% in August from July, above the median forecast of a 0.7% decrease in a Reuters poll of economists but still in negative territory. The sector has been alternating between gains and losses this year as tight monetary policy keeps sales in check.

In the latest blow to Binance’s global ambitions, a Brazilian congressional committee has recommended the indictment of four of the company’s senior leaders, including its founder and CEO Changpeng Zhao, Bloomberg News reported. The committee, which had been conducting a probe into crypto-related ponzi schemes in Brazil, can only make suggestions. Brazilian police will decide whether to proceed with actual indictments.

Brazilian auto exports are set to plunge by double digits in 2023 when compared with the previous year, automaker association Anfavea said on Friday, as a severe economic crisis in neighboring Argentina hits shipments to that country, Reuters reported. The association said in a statement it now projects exports to fall 12.7% in 2023 to 420,000 vehicles, a major cut from its previous estimate of a 2.9% drop in the period. "Exports have been the major warning point for the automotive sector in the first nine months of the year," it said.

Brazil is bringing an urgent message to next week’s meetings of the International Monetary Fund: Western-backed lenders must give developing nations more say if they want to remain relevant, Bloomberg News reported. A major redistribution of IMF quotas to correct the underrepresentation of large emerging-market economies has been a decades-old demand from Brazil and other key developing countries, but the price of inaction is growing higher, according to Tatiana Rosito, international affairs secretary at the Brazilian Finance Ministry.

Industrial production in Brazil rose slightly less than expected in August, data from government statistics agency IBGE showed on Tuesday, as the sector struggles to gather speed amid high interest rates, Reuters reported. Output was up 0.4% in August from July, IBGE said, recovering part of the losses seen a month earlier but below forecasts as the median estimate in a Reuters poll projected an increase of 0.5%.

Brazil’s Senate approved legislation to limit the growth of credit card debt to 100% of its original amount, an attempt to cap interest rates that currently average nearly 450%, Bloomberg News reported. Lawmakers passed the bill by acclamation Monday, a day before the expiration of a provisional measure that included the cap. The lower house of congress approved the bill in September, meaning it is now on track to become law. Once it is enacted, credit card issuers will have 90 days to submit their own regulatory proposal that will need authorization from Brazil’s national monetary council.

Brazil's jobless rate dropped for the fifth consecutive rolling quarter in the three months ended in August, reaching its lowest since early 2015 as the labor market in Latin America's largest economy continues to show resilience, Reuters reported. The unemployment rate reached 7.8% in the quarter through August, statistics agency IBGE said on Friday, in line with market expectations and down from the 7.9% seen in the previous rolling quarter.

Brazil’s central bank raised its 2023 economic growth forecast while warning of a looming drop-off in activity next year as monetary policy remains tight, Bloomberg News reported. The bank forecasts gross domestic product will expand 2.9% this year, more than the 2% growth estimate from June, according to its quarterly inflation report published on Thursday. It sees activity growing 1.8% next year. By comparison, analysts surveyed by the monetary authority have raised their GDP estimates to 2.92% for 2023 and 1.5% in 2024.