South America

A $4 billion accounting shortfall would typically raise alarm bells for an auditor. Somehow, a PricewaterhouseCoopers LLP affiliate didn’t catch it at Americanas SA, Bloomberg News reported. Investor and consumer groups are calling for closer scrutiny of the accounting firm after the unveiling of balance-sheet irregularities that led 93-year-old Brazilian retailer Americanas to seek protection from creditors last month. The gap came in part from supplier financing that wasn’t reflected the right way in the company’s financial statements, which have been audited by PwC since 2019.

Brazil's central bank has expressed concern at increased inflation expectations, saying that a fiscal framework revision and government stimulus package may lead to upward pressure on consumer prices, Reuters reported. In the minutes of its Jan.31 - Feb.1 meeting, when the rate-setting committee kept the benchmark rate at 13.75%, some committee members noted that the fiscal package presented by the Finance Ministry should mitigate the fiscal risks. Nonetheless, "it will be important to monitor the challenges for its implementation," the minutes added.

Top Brazilian banks that are creditors of distressed retailer Americanas SA plan to go after personal assets of billionaires who are the firm’s biggest shareholders: Jorge Paulo Lemann, Marcel Telles and Carlos Sicupira, Bloomberg News reported. The firms will make the move if the billionaires don’t rescue the company with combined capital injections of at least 15 billion reais ($3 billion). The billionaires have offered no more than 6 billion reais.

Oi SA, the distressed Brazilian telecom operator, asked a court to shield it from creditors ahead of a major debt payment, in what may lead to a second bankruptcy protection process in seven years, Bloomberg News reported. The company, which underwent one of the largest corporate restructurings in Brazil’s history — that began in 2016 and ended just last year — said it needs urgent help to fend off creditors, according to a filing to a Rio de Janeiro court seen by Bloomberg News. The company confirmed the request for a preliminary injunction on Thursday.

Brazil's currency firmed and interest rate futures jumped on Thursday as a more hawkish outlook from the central bank led economists to push back forecasts for rate cuts to next year, Reuters reported. The central bank's policy statement was a setback for newly inaugurated President Luiz Inacio Lula da Silva, who has blasted the level of interest rates - maintained at a six-year high of 13.75% on Wednesday - as an obstacle to economic growth.

Peru's consumer prices rose less than expected in January despite growing political tensions, but the 12-month rate still ticked up as the Andean nation battles the highest inflation in a quarter of a century, Reuters reported. Government data showed on Wednesday that consumer prices in the Lima metropolitan region, seen as the national benchmark, were up 0.23% in the first month of the year, well below the median forecast of 0.43% in a Reuters poll of economists.

Venezuela's state oil firm PDVSA is toughening terms for buyers after a month-long halt to most exports of crude and fuel, demanding prepayment ahead of loadings in either cash, goods or services, company documents showed, Reuters reported. PDVSA's new Chief Executive Pedro Tellechea put the move in place this month. It reinforces measures implemented last year after several buyers skipped out on payments for oil, which provides most of the South American country's income.

Brazil's government debt as a share of gross domestic product ended 2022 at its lowest level in more than five years, central bank data showed on Monday, helped by nominal economic growth and net public debt redemptions, Reuters reported. The country's gross debt fell to 73.5% of GDP in December from 74.6% in November, accumulating a 4.8 points contraction in the year, to its lowest ratio since July 2017, when it reached 73.2%. The reduction was mainly led by a nominal rise in GDP, which is also affected by inflation.

A Brazilian court has ordered the seizure of all corporate emails of managers and board members from bankrupt retailer Americanas SA sent and received over the last 10 years, according to documents seen by Reuters.

Chile's central bank maintained its benchmark interest rate at 11.25% on Thursday, as expected, in a unanimous decision by its governing board, with the bank saying inflation remains high and related risks persist, Reuters reported. The central bank embarked on an aggressive monetary policy tightening cycle in July 2021 to reign in spiraling inflation and has increased the rate by a 1,075 basis points since then to its current level. The rate has remained at 11.25% since October.