South America

Brazil’s central bank said annual inflation will run above the tolerance range for the next six months, as food prices rise significantly and services costs remain elevated despite aggressive interest rate hikes, Bloomberg News reported. There will be a target breach with June 2025 inflation under the new framework, central bankers wrote in the minutes to their Jan. 28-29 policy meeting, when they stuck with prior guidance and lifted the Selic to 13.25%.

Colombia unexpectedly halted a series of interest rate cuts that began in 2023 as policymakers fret about the worsening fiscal outlook, a large minimum wage hike and tariff threats from US President Donald Trump, Bloomberg News reported. The central bank kept its benchmark interest rate steady at 9.5% in a split decision, Governor Leonardo Villar said after the meeting. Eight economists in a Bloomberg survey correctly predicted the move while 24 had forecast a quarter-percentage point reduction.

LATAM Airlines said on Friday it was still too early to discuss potential impacts of a planned merger between its two largest rivals in top market Brazil, but voiced trust in antitrust watchdog CADE to put in place mitigation measures, Reuters reported. "What we do not want is a more concentrated market, with fewer options for passengers, higher prices and less growth," LATAM's head in Brazil, Jerome Cadier, told reporters in an earnings call.

Brazil’s central bank lifted its interest rate by a full percentage point for the second meeting and said the board will do the same at the next decision while leaving their policy options against inflation open thereafter, Bloomberg News reported. Policymakers raised the benchmark Selic to 13.25% in an unanimous vote late Wednesday, as expected by all economists surveyed by Bloomberg and a vast majority of traders in the options market. The monetary authority has increased borrowing costs by 2.75 percentage points since September.

Chile’s central bank paused its cycle of interest rate cuts and left all options on the table for future borrowing cost adjustments, citing heightened uncertainty as well as domestic and global inflation risks, Bloomberg News reported. Policymakers led by Rosanna Costa voted unanimously to keep borrowing costs at 5% late on Tuesday, as expected by all analysts in a Bloomberg survey. In an accompanying statement, board members wrote that a weaker peso, higher labor costs and an increase in electricity tariffs are driving inflation dynamics.

Brazil reached a record high for bankruptcy protection filings in 2024, with 2,273 companies seeking judicial relief, according to data from Serasa Experian. This figure marks a 61.8% increase from 2023 and is 22% higher than the previous peak in 2016, which saw 1,863 filings, Valor International reported. Experts predict this trend will worsen, with both 2025 and 2026 expected to surpass last year’s numbers due to a more challenging economic outlook.

A planned merger between Brazilian airlines Gol and Azul would strengthen the sector and prevent either company from failing, Brazil's ports and airports minister told Reuters, giving the potential move a key government nod, Reuters reported. Azul and Abra, the majority investor of Gol and Colombia's Avianca, announced earlier this month they had signed a non-binding memorandum of understanding with the intent of combining their businesses in Brazil.

Brazil’s annual inflation slowed less than expected in early January despite a drop in energy costs, highlighting the challenges facing policymakers as they prepare to raise the interest rate again next week, Bloomberg News reported. Official data released Friday showed consumer prices rose 4.5% from a year earlier. On the month, they increased 0.11%. The central bank has pledged to deliver its second straight interest rate hike of 100 basis points next week — which would lift the benchmark Selic to 13.25% — as policymakers maneuver to control inflation.

A plan to merge two of Brazil's top airlines to create a dominant carrier will likely win regulatory approval as a government push for a financially healthy sector outweighs concern about restricted competition, experts and lawyers told Reuters. A floated combination of Gol and Azul formalized with a memorandum of understanding last week, would give the new firm overwhelming control over the country's domestic market. But both have faced financial turbulence since the pandemic, along with Brazil's current No. 1 carrier, LATAM Airlines' local unit.

After announcing an acquisition deal with investors from the US and UK to resolve its bankruptcy process, WOM Colombia is now planning to begin deploying 5G networks, BNAmericas.com reported. “We will be deploying [5G] infrastructure in the second half of the year,” said WOM Colombia CEO Ramiro Lafarga. WOM acquired spectrum in the 3.5GHz band in December 2023 but has not yet initiated the network deployment. The company paid approximately US$74mn and committed to connecting 3,180 schools and establishing 24 base stations with 4G coverage along primary and secondary roads.