Brazil’s securities regulator filed the first charges involving the accounting scandal and bankruptcy at retail giant Americanas SA, Bloomberg News reported. The CVM, as the regulator is known, accused the company’s ex-chief executive officer Sergio Rial over “inconsistencies” in the disclosure of a 20 billion reais ($4 billion) accounting hole to the market.

Across Brazil’s dilapidated credit markets, investors are starting to whisper a new mantra in the face of double-digit interest rates and corporate malaise: The pain can’t last forever, Bloomberg News reported. The desperation for easier credit conditions is palpable nine months after central bankers in Latin America’s largest economy pinned their benchmark interest rates at 13.75%. Bond deals are still struggling to gain traction, bankruptcies are rising and investors keep on pulling cash out of Brazilian domestic bond funds.

Brazil’s economy roared back in the first months of 2023, lifted by bumper harvests that outweighed the drag of double-digit borrowing costs, Bloomberg News reported. Official data released on Thursday showed gross domestic product expanded 1.9% in the January-March period from the previous quarter, much more than the 1.2% median estimate of analysts surveyed by Bloomberg. From a year ago, the economy grew 4%. A rebound in Brazil’s agriculture and a strong labor market helped deliver far better results than economists had forecast at the start of 2023, though few see it lasting.

Brazil's economy likely surged back to growth in the first quarter of the year, powered by record-breaking crops and solid crude oil output that more than offset the drag of subdued manufacturing activity, a Reuters poll of economists showed. Strong exports by commodities-producing sectors were seen adding to resilient private consumption in lifting gross domestic product (GDP), despite the negative effects of high interest rates and a worrying rise in government debt.

Brazil's newly introduced fiscal framework is stricter than they appear and will require a discussion of important spending cuts, Gabriel Galipolo, the executive secretary of the Finance Ministry, said on Tuesday, Reuters reported. Lawmakers in the lower house of Congress last week passed the main text of legislation that is set to replace the current spending cap, which has been breached several times in recent years to allow higher government spending.

Brazilians are struggling to pay their debts on time, with four out every ten adults facing default, as central bankers keep monetary policy tight in an effort to bring inflation back to their target, Bloomberg News reported. Overdue debts grew 18.42% in April from a year ago, according to data from the national confederation of shopkeepers reported by news site Poder360. The number of Brazilians facing default also grew around 8%, with most battling debts with local banks, the confederation said.

Bonds of Unigel slipped into distressed territory on concern that poor results may put the chemical maker at risk of covenant violations, Bloomberg News reported. Dollar notes due in 2026 are down 34 cents since the firm posted its first-quarter earnings earlier this month, seen as weak by analysts. The plunge — the worst among Latin America’s corporate borrowers this quarter, according to data compiled by Bloomberg — sent yields jumping to more than 35%, from around 8% in January.

Brazil's Finance Minister Fernando Haddad emphasized on Wednesday that there is room for interest rate cuts in the country, contrasting the central bank chief's acknowledgment of ongoing challenges in achieving disinflation, Reuters reported. "My understanding that there is room for a cut cycle is no offense," he said during a hearing at the Lower House, adding that he is not questioning the central bank's power to set rates.

Brazil’s central bank chief said high levels of public debt are to blame for interest rates steady at a six-year high, countering President Luiz Inacio Lula da Silva’s criticism of monetary policy and appeals for a rate cut, Bloomberg News reported. If government debt were low, “the cost of money would be cheaper for everyone,” Roberto Campos Neto said during a TV interview with Brazil’s CNN. Campos Neto said it’s not the central bank’s fault when the government issues a bond and pays yields of 6% above inflation, like Brazil did recently.