Brazil

A recent flurry of judicial and economic rule changes has served as a reminder of just how unpredictable operating in Latin America can be, denting the region’s appeal for foreign investors already weary after years of sub-par returns, Bloomberg News reported.

Brazil Finance Minister Fernando Haddad said the government is worried a resurgence in extreme weather will spur inflation as central bankers are expected to lift the interest rate starting next week, Bloomberg News reported. The nation’s persistent dry spell can stoke food and energy price increases, Haddad told reporters in Brasilia on Wednesday. At the same time, such cost rises are not easily controlled with borrowing cost hikes, he said. “The central bank has the technical framework to make the best decision,” Haddad said.

Brazil’s annual inflation eased roughly in line with expectations in August, offering limited relief to a central bank that’s under pressure to lift interest rates to contain above-target price increases, Bloomberg News reported. Official data released Tuesday showed prices rose 4.24% from a year earlier, just below the 4.27% median estimate of analysts surveyed by Bloomberg. On the month, inflation stood at -0.02%. The robust pace of growth in Latin America’s largest economy has investors betting that a hike to the benchmark Selic from its current level of 10.5% is imminent next week.

In just a little over a decade, Nu Holdings Ltd. has gone from an obscure fintech startup in Sao Paulo to the most valuable bank in all of Latin America. It’s been a dizzying ascent, powered by a business model that Brazil’s uber-conservative banking titans never had much of a stomach for: lending to low-income families. Growth keeps coming at a breakneck pace — some 60% of all Brazilian adults now have Nubank’s app on their phone — and investors keep frantically bidding the stock higher, Bloomberg News reported.

Azul is not planning on filing for Chapter 11 bankruptcy protection, the Brazilian airline's CEO told Reuters, contradicting reports which caused the carrier's shares to nosedive on Thursday, Reuters reported. Bloomberg reported on Wednesday Azul was considering options ranging from an equity offering to filing for Chapter 11 in the United States in order to address its debt obligations. The report was "misinterpreted," the company responded in a filing, as its Brazil-listed shares sank 24%.

Brazil’s possible cycle of monetary tightening would be gradual, central bank chief Roberto Campos Neto said on Friday as he sought to temper investor bets on large interest rate hikes starting next month, Bloomberg News reported. “If and when there is a cycle of interest rate increases, it will be gradual,” Campos Neto said at an event organized by XP Investimentos. Still, the bank will remain data dependent and refrain from giving guidance on its next steps, he said.

The largest shareholder of ailing Brazilian airline Gol Linhas Aereas Inteligentes SA is nearing a deal to raise $1.3 billion of funds from investment firm Castlelake LP to stave off the risk of defaulting on its bonds, Bloomberg News reported. Abra Group Ltd., which also owns Colombian airline Avianca Holdings SA, outlined Castlelake’s proposal to its investors last week. Under the plan, the investment firm would refinance Abra’s secured bonds due 2028, which could default after Gol raised a bankruptcy loan as part of its chapter 11 procedure in the U.S.

Azul SA shares slumped to a record low Thursday as the Brazilian airline is weighing options from an equity offering to a U.S. chapter 11 filing to address approaching debt obligations, Bloomberg News reported. The troubled carrier is also actively working get a merger Gol Linhas Aereas Inteligentes SA over the line to convince creditors that a new combined entity would have lower debt levels and better growth prospects. But that approach is seen as less attractive given Azul’s imminent cash needs and weak financial results.

Brazilian lawmakers approved a long-awaited financial aid plan for the airline sector that is expected to provide 5 billion reais ($914 million) in credit for troubled carriers, Bloomberg News reported. The program, already passed by the Senate, was cleared in the lower house on Wednesday. It now needs to be signed by president Luiz Inacio Lula da Silva, who campaigned on a pledge to restore prosperity in Brazil and wants to cut fares enough to allow the poor to fly regularly.