South America

Brazil’s President Jair Bolsonaro has begun expressing irritation at the central bank’s newfound autonomy as surging inflation presents a threat to his 2022 reelection prospects, government officials told The Associated Press. On Thursday, during a flight home from Mato Grosso state, Bolsonaro said that he regretted signing the bill into law earlier this year that granted the bank autonomy, a high-level official aboard told the AP.
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Brazilian prosecutors asked a bankruptcy court on Wednesday to compel miners Vale SA and BHP Group Ltd to fully pay offtheir Samarco joint venture's 50.7 billion reais ($9.47 billion) debt, according to a court document reviewed by Reuters. Samarco filed for bankruptcy protection in April as it struggled to restructure its debt, which it stopped servicing after a dam burst at a mine in 2015, killing 19 people, releasing a giant torrent of sludge and halting production.
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Swiss-Irish food group Aryzta has agreed a new €500 million revolving credit facility with three banks and has announced the disposal of its Brazilian businesses, the Irish Times reported. No financial details have been disclosed on the sale of the Brazilian subsidiaries to Grupo Bimbo SAB de CV. The transaction is expected to close shortly. Aryzta said the new credit facility, which is expected to be used by early October, is underwritten by Credit Suisse, Rabobank and UBS. It replaces the group’s current €800 million facility, which maters in September 2022.
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Chile’s economy beat expectations in the second quarter as billions of dollars in fiscal stimulus triggered a retail sales frenzy during the pandemic, Bloomberg News reported. Gross domestic product grew 1% from the first quarter, more than the 0.7% median estimate from analysts in a Bloomberg survey. The economy expanded 18.1% from a year prior, the central bank reported on Wednesday.
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Argentina’s central bank is making it harder for investors to buy dollars as the already draconian capital controls fail to stop the gap between the official and parallel exchange rates from widening, Bloomberg News reported. Regulators are tightening the screws on operations where investors buy assets in pesos and sell them abroad in dollars to obtain foreign currency. The measures, aimed at money laundering and tax evasion, were announced late Thursday. It’s the latest set of controls to prevent dollars flowing out of Argentina’s crippled economy.
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Colombia’s flag carrier Avianca has submitted a reorganisation plan to a US bankruptcy court, Flight Global reported. The Bogota-based airline’s plan, submitted to the bankruptcy court for the Southern District of New York on 10 August, outlines its obligations to creditors and the settlement of claims. It says a new strategy will help it simplify operations and position Avianca to thrive in the Latin American market. Avianca and its Latin American peers Aeromexico and LATAM Airlines declared bankruptcy last year after the coronavirus decimated global air travel demand.
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Peru’s sol rebounded from a record low after Central Bank President Julio Velarde agreed to stay in the post for another five-year term, Bloomberg News reported. Velarde, 69, has been in the role since 2006, overseeing a long period of relatively strong growth and low inflation. After a series of conversations with new Finance Minister Pedro Francke about extending his tenure, the decision was made on Monday afternoon. The sol gained 1.6% to 4.05 per dollar at 9:10 a.m. in Lima, the biggest increase in emerging markets on Tuesday.
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Bankrupt units of a Mexican and Colombian payroll lender have secured court approval to access part of a $45 million loan to fund operations during their chapter 11 case after agreeing to install a chief restructuring officer, Reuters reported. During a virtual hearing on Wednesday, U.S. Bankruptcy Judge Kate Stickles in Wilmington, Del., signed off on Alpha Latam Management LLC's request to tap $17.5 million of the full loan. A hearing on the rest of the loan will be held at a later date. ALM is an affiliate of Mexico’s Alpha Holding SA de CV, which is not part of the chapter 11 case.
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As the power of Venezuelan opposition leader Juan Guaido has dwindled, he’s kept something in his back pocket: Citgo Petroleum Corporation, the American refiner and gas distributor with the potential to bring in hundreds of millions of dollars to help topple President Nicolas Maduro, Bloomberg News reported. Now Guaido is on the verge of losing the company. Creditors owed $7 billion in debts accrued by Maduro and his predecessor, Hugo Chavez, are mounting legal challenges to wrest control of it -- and appear to be succeeding.
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Venezuela says it will make a million-to-1 change in its currency soon, eliminating six zeros from prices in the local currency as hyperinflation continues to plague the troubled South American nation, the Associated Press reported. Venezuela’s central bank on Thursday announced the change to the bolivar will go into effect Oct. 1. The new 100 bolivar bill will be the highest denomination. It is equivalent to 100,000,000 of the current bolivar. This is the third adjustment since socialist leaders began governing Venezuela.
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