Brazil

Brazil's central bank governor Roberto Campos Neto on Wednesday said policymakers are aiming to tighten cryptocurrency regulation and subject brokerages to their supervision, Reuters reported. Speaking during a hearing in Congress, Campos Neto emphasized regulators will scrutinize the backing of cryptocurrencies and associated activities, given the significant surge in cryptocurrency imports by Brazilians. Data released by the central bank this week revealed cryptocurrency imports jumped by 44.2% from January to August compared to the same period last year, totaling $7.4 billion.

Brazil's annual inflation accelerated in mid-September to 5.00%, data from statistics agency IBGE showed on Tuesday, coming in line with market expectations as the central bank signals it will maintain its current pace of monetary easing, Reuters reported. Analysts believe inflation in Latin America's largest economy has already reached its lowest for the year while remaining relatively under control, allowing the monetary authority to keep lowering borrowing costs.

Latin America’s largest water utility is getting ready for a public share sale next year that would see Sao Paulo’s state government give up control, according to the company’s chief executive officer, Bloomberg News reported. Cia. de Saneamento Basico do Estado de Sao Paulo, known as Sabesp, has a “potential window” for the equity offering starting in mid-May, after Sabesp publishes its first-quarter financial results, and running until mid-August, Andre Salcedo said in an interview.

Brazil’s development bank BNDES plans to provide 20 billion reais ($4.1 billion) in funds for infrastructure projects this year, two-thirds more than in 2022 and mostly through the purchase of local debt issued by companies that invest in the sector, Bloomberg News reported. The strategy is aimed at encouraging private investors to join in the purchase of infrastructure bonds, increasing the impact of financing by BNDES, according to Felipe Borim Villen, deputy managing director of infrastructure at the bank.

The Brazilian economy kicked off the third quarter with a stronger-than-expected pace, bolstering recent upward revisions in the country's GDP growth forecast for 2023, Reuters reported. The IBC-Br economic activity index, a key predictor of gross domestic product, registered seasonally adjusted growth of 0.44% in July from June, surpassing the median forecast of a 0.3% expansion in a Reuters poll of economists. According to the central bank, the IBC-Br was up 0.66% on a non-seasonally adjusted basis from July 2022 and marked a rise of 3.12% in the 12 months.

The Brazilian government expects cuts of at least 50 basis points in the central bank's benchmark interest rate over the remaining three meetings this year, aiming to end 2023 with the rate below 12%, Planning Minister Simone Tebet said on Tuesday, Reuters reported. The Selic rate stands at 13.25% after the central bank embarked on an easing cycle last month with a half-percentage-point reduction, marking the end of nearly a year of holding rates steady to combat high inflation. The next monetary policy decision is scheduled for Sept. 20.

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.