South America

Brazil's outstanding public debt is expected to increase this year up to 14%, the Treasury said on Thursday, and it stressed that commitment to the public accounts balance will be essential to lengthen the country's debt profile, Reuters reported. In its Annual Financing Plan, the Treasury set the 2023 public debt target at a range between 6.4 trillion reais and 6.8 trillion reais, up from last year's 5.951 trillion reais ($1.2 trillion).
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Brazilian shopping chain Americanas SA yesterday filed for chapter 15 bankruptcy, a move that protects its U.S. assets while insolvency proceedings play out in its home country, Bloomberg News reported. The retailer nosedived in January after becoming mired in an accounting scandal. The firm, backed by billionaire Jorge Paulo Lemann, filed for bankruptcy at a court in Rio de Janeiro on Jan. 19. In disclosures to investors, the firm implied it misreported numbers connected to some of its financing and wrongly deducted interest paid to lenders from its liabilities.
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Argentina’s plan to repurchase $1 billion of overseas bonds meets the definition for a default, according to Moody’s Investors Service, Bloomberg News reported. The credit assessor sees the nation’s strategy of buying back short-dated dollar bonds — primarily those due in 2029 and 2030 — through direct market purchases as tantamount to a “distressed exchange and hence a default under our definition,” Moody’s analysts including Jaime Reusche wrote in a note. Moody’s still scores Argentina at Ca, the second-lowest rating. It has a stable outlook on the nation.
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Brazilian retailer Americanas SA reported 7,720 creditors and debt totaling nearly $8 billion within its restructuring process, a Rio de Janeiro court said on Wednesday, Reuters reported. Americanas, backed by the billionaire trio that founded 3G Capital, entered bankruptcy protection last week after disclosing "inconsistencies" in its accounting, leading top investors such as BlackRock and Capital International to scale back their positions in the firm.
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Americanas SA three largest shareholders, the billionaire founders of 3G Capital, said on Sunday they had not known of $4 billion in accounting 'inconsistencies' at the Brazilian retailer, Reuters reported. In their first official statement since Americanas filed for bankruptcy this month, Jorge Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles said they were "sorry for investor and creditor losses". "We didn't know of and would never allow any accounting manipulation in the company", the statement said.
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Inflation in Venezuela hit 234% in 2022, Vice President Delcy Rodriguez said on Monday, representing a slowdown from the previous year, as the South American country struggles with a deep and lengthy economic crisis, Reuters reported. Rodriguez provided the inflation rate during a meeting with Turkish and Venezuelan business leaders. Venezuela's central bank infrequently publishes economic data, and has not given inflation data since October.
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Brazil's annual consumer prices came in slightly above market expectations in the month to mid-January, statistics agency IBGE said on Tuesday, as policymakers in Latin America's largest economy work to lower inflation to the central bank's target, Reuters reported. The IPCA-15 consumer price index rose 5.87% in the 12 months to mid-January, slightly exceeding the 5.83% median forecast in a Reuters poll of economists, though slowing from the 5.9% seen in the previous month.
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Argentina and Brazil are in the preliminary stages of renewing discussions on forming a common currency for financial and commercial transactions, reviving an often-discussed plan that would face numerous political and economic hurdles, Bloomberg News reported. South America’s two largest economies have considered options to coordinate their currencies for decades, often to counter the influence of the dollar in the region. The persistent macroeconomic imbalances of both countries, together with recurrent political obstacles to the idea, has resulted in little practical progress.
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A Rio de Janeiro court on Thursday accepted Brazilian retailer Americanas SA's bankruptcy protection request, the firm said, days after the company uncovered nearly $4 billion in accounting inconsistencies and amid a legal feud with creditors, Reuters reported. Americanas, backed by the billionaire trio that founded 3G Capital, said in a securities filing that it will restructure debts of about 43 billion reais ($8.23 billion).
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