Brazil

Brazil's central bank has put the brakes on tougher regulations for the burgeoning fintech industry, withdrawing a draft proposal that had been set to be voted on last month by the government's top financial policy-making body, four sources familiar with the matter told Reuters. On Nov. 18, the central bank proposed that the regulations be discussed at an extraordinary meeting of the National Monetary Council (CMN) but the new rules - which look to level the playing field between fintechs and traditional banks - were never voted on, the sources say.

Brazil’s economy fell into recession as extreme weather conditions, high interest rates and inflation cut short its recovery from the pandemic, dealing a blow to President Jair Bolsonaro just as he prepares for his re-election campaign, Bloomberg News reported. Gross domestic product fell 0.1% in the July-September period after posting a revised decline of 0.4% in the second quarter. From a year ago, the economy expanded 4%, the national statistics agency said on Thursday. The downturn shows mounting challenges for Latin America’s largest economy.

Brazilian airline Azul SA confirmed on Monday that it made an offer earlier this month to combine with Chile’s LATAM Airlines Group , which is in bankruptcy proceedings, but said it had since decided to focus on its own operations, Retuers reported. In an exchange filing published late on Sunday, Azul said that it would consider potential partnerships only in the future. The Brazilian airline said its non-binding proposal submitted on Nov. 11 had included around $5 billion in equity financing and was backed by some creditors of LATAM.

Shares in Brazilian state-run power company Eletrobras plunged on Wednesday after it reported third-quarter net income of 965 million reais ($175.4 million), down 66% year-on-year, hit mainly by provisions relating to ongoing litigation, Reuters reported. The lawsuits relate to a compulsory energy loan program, which required industrial energy customers to provide money to pay for Brazil's electricity sector. The government promised to repay the companies but this has been repeatedly postponed.

Surging construction costs are sending delinquency rates skyrocketing among Brazilian developers, persuading a growing number of lenders to dump their loans and creating a feast for distressed-asset funds, Bloomberg News reported. “I’m dealing with explosive demand from banks trying desperately to sell loans they made to construction firms,” said Eduardo Martins, a partner at MGC Holding, one of Latin America’s biggest distressed-asset managers.

Brazil’s lower house of congress passed a controversial proposal that bends the country’s fiscal rules to finance a new social program President Jair Bolsonaro is launching ahead of his 2022 re-election campaign, Bloomberg News reported. The so-called precatorios bill was approved late on Tuesday by 323-172 votes, a wider margin of support than it had received just a week ago. It now needs the backing of three-fifths of senators, also in two rounds of voting.

Secondary-market prices for legal claims against Brazil’s government tumbled to less than two-thirds their face value on President Jair Bolsonaro’s proposal to delay court-ordered payments on the debt, Bloomberg News reported. The securities had been trading at about 90% of face value as recently as the first half of this year, and are now closer to 60%, according to executives at banks and asset-management firms who trade the debt. The market for legal claims has been attracting investors seeking higher returns after the nation’s benchmark interest rate fell to as low as 2% last year.

Brazilian airline Gol Linhas Aereas Inteligentes reported on Tuesday a net loss of 884.6 million reais ($160.54 million) for the third quarter as traffic remained below pre-pandemic levels, Reuters reported. That compared with a loss of 872 million reais a year earlier and the company said that while demand for air travel continued to pick up in Brazil, it has still only reached 53% of pre-pandemic levels.

Brazilian President Jair Bolsonaro said on Monday that dealing with high fuel prices in the country is his top priority right now, adding that he sees the privatization of state-run oil company Petrobras as an "ideal" move, Reuters reported. Bolsonaro told reporters during a visit to Anguillara Veneta, in Italy, that he was "unofficially" told that Petroleo Brasileiro SA - as the company is formally known - is expected to raise fuel prices at the refineries again in about 20 days. "Every bad thing that comes from Petrobras is my fault...