Argentina and the International Monetary Fund have reached an understanding on when the nation will achieve a balanced primary budget, marking a first key step to renegotiating more than $40 billion of debt, Bloomberg News reported. The agreement comes after talks intensified in the past week following months of delays, and Argentina plans to make a payment of more than $700 million due on Friday. The parties have agreed for the country to reach a balanced primary budget -- that is, a budget without including interest payments -- in 2025.

Latam Airlines Group SA “flatly rejected” Azul SA’s offer to buy the bankrupt carrier even though the sale would be a better deal for creditors, Azul contends in new court filings, Bloomberg News reported. Azul for months has been expressing interest in a tie-up with Chile’s Latam, but the bankrupt airline has refused to seriously engage in talks, lawyers for Brazil-based Azul said in court papers. Azul said its deal outlined in a Nov. 11 term sheet values Latam at $13 billion and would provide more for creditors than Latam’s current proposal, which is on the verge of seeking court approval.

Argentina’s looming deadline to make a payment of over $700 million to the International Monetary Fund on Friday is exposing a growing divide within the ruling coalition, Bloomberg News reported. The public disagreements in the government of President Alberto Fernandez, with its more radical wing suggesting the country could default on the Washington-based organization, come as Economy Minister Martin Guzman leads negotiations with IMF staff for a new program to reschedule payments on over $40 billion in outstanding debt.

Brazil posted negative foreign direct investment (FDI) of $3.9 billion in December, the worst monthly figure ever recorded in Latin America's biggest economy, bringing the 2021 total to $46.4 billion, the central bank said yesterday, Reuters reported. The figure last month was slammed by a negative $6 billion in reinvested profits in the country, according to the central bank. In the series started in 1995, Brazil had recorded negative monthly FDI on two previous occasions - the $24 million reported in March 1995 and the $103 million in July 2016.

Brazil's IPCA-15 consumer price index rose 0.58% in the month to mid-January, decelerating from previous figures but at a pace that still exceeded expectations, statistics agency IBGE said on Wednesday, Reuters reported. The monthly rise was higher than the 0.43% increase foreseen by economists in a Reuters poll but slowed from a 0.78% surge in December thanks to lower transportation prices. According to IBGE, prices rose in the remaining eight of nine groups of goods and services covered. The most significant impact came from foods and drinks, with a monthly increase of 0.97%.

Brazilian power company Companhia Energetica de Sao Paulo (CESP) on Monday said its board of directors has approved terms of a deal with conglomerate Votorantim SA and Canada Pension Plan Investments Board (CPPIB) to merge the trio's energy assets in Brazil, Reuters reported. CESP is expected to become a full subsidiary of Votorantim and CPPI's joint venture VTRM Energia once the deal is closed. The terms of the transaction, which valued CESP at about 9.1 billion reais ($1.67 billion), were disclosed this month. The company has also scheduled a shareholder meeting for Feb.

Argentina sharply reduced its budget deficit in 2021 as President Alberto Fernandez tries to cut down on spending amid talks with the International Monetary Fund, Bloomberg News reported. The so-called primary deficit, which excludes interest payments, fell to 3% of gross domestic product from 6.5% in 2020. The figure, boosted by proceeds from a wealth tax, was also below the economy ministry’s estimate for a 3.5% gap. Economy Minister Martin Guzman says he wants to eliminate primary fiscal deficits by 2027 as part of a deal to refinance about $40 billion owed to the IMF.

Investors have long been confident about at least one thing in wild and unpredictable Argentine markets: A big peso devaluation was coming, and the best place to take refuge was dollar-linked bonds. Now, after piling into the trade for two straight years, they are throwing in the towel, Bloomberg News reported. They were so surprised that the devaluation didn’t come in the immediate aftermath of November congressional elections -- politically, the most logical time to do it -- that they have begun to give credence to the government’s pledge that there’s no such plan in the works.

Brazil’s next president will have to temporarily increase public spending to fight poverty and unemployment, according to a close economic adviser to Luiz Inacio Lula da Silva, who leads opinion polls ahead of the October vote, Bloomberg News reported.

Local creditors of Latam Airlines Group SA are up in arms over a bankruptcy plan that would leave them with next to nothing even as holders of overseas bonds get almost all their money back, Bloomberg News reported. BancoEstado SA, a Santiago-based bank acting on behalf of local noteholders, has asked Latin America’s largest airline to improve its terms. The investors are threatening to sue if their demands aren’t meant, and contend that as a Chilean company, Latam should have filed for protection in local courts — instead of New York — that would have treated domestic creditors better.