South America

The nasty battle between Argentina and a group of New York hedge funds has claimed another victim: Citigroup. The bank said on Tuesday that it would shut its custody business in Argentina after a federal judge in New York last week rejected its request to lift an order that prevented the bank from making interest payments to investors holding $2.3 billion in Argentine notes, the International New York Times DealBook blog reported.

Oleo e Gas Participações SA, a Brazilian oil company under bankruptcy protection, on Monday said it suspended payments for an oil-production vessel to bankrupt ship-leasing company OSX Brasil SA for six months, Reuters reported. Oleo e Gas, formerly known as OGX Petroleo e Gas Participações SA, said in a statement that it made the decision after being unable to come to an agreement on Friday over future payments to OSX for the OSX-3 floating production, storage and offloading ship (FPSO) in a hearing before a bankruptcy judge in Rio de Janeiro.

Hundreds of thousands of protesters took to the streets in cities across Brazil on Sunday to express their ire at President Dilma Rousseff, raising pressure on her as she grapples with an onslaught of challenges including an economy mired in stagnation, a sweeping bribery scandal and a revolt by some of the most powerful figures in her governing coalition, the International New York Times reported. The protests, organized to coincide with commemorations of the re-establishment of democracy 30 years ago after a long military dictatorship, reflect rising disenchantment with Ms.

Venezuela will begin installing some 20,000 fingerprint scanners at supermarkets nationwide in a bid to stamp out hoarding and panic buying, which the government blames for long lines and widespread shortages of basic goods, The Wall Street Journal reported. The oil-rich nation has been selectively rolling out the rationing system for months at state-run supermarkets along the western border with Colombia, where smuggling of price-controlled goods is a major problem.

Brazil’s currency slid to a 10-year low against the dollar on Wednesday as concerns grew that a corruption scandal at state-run oil group Petrobras engulfing the country’s political elite threatens to scupper the government’s austerity drive, the Financial Times reported. The real fell 2.2 per cent against the dollar to R$2.9947 after the senate leader Renan Calheiros of the PMDB, the main coalition partner of President Dilma Rousseff, blocked an important fiscal measure in congress that is seen as essential to helping reverse Brazil’s growing budget deficit.

President Dilma Rousseff ’s administration, fearful of a potential loss of Brazil’s investment-grade debt rating, is stepping up austerity measures, angering supporters and exacerbating an already painful economic slowdown, The Wall Street Journal reported. The government on Thursday announced a cap on government spending and investment, as well as additional tax increases for businesses, moves aimed at shoring up Brasília’s deteriorating finances. The new measures will limit federal spending to 75 billion Brazilian reais ($26.3 billion) from Jan.

Debt-holders who want to jumpstart restructuring talks with Argentina may have to wait until a court rules next month on whether to let a disputed bond payment go through, further extending a legal feud that has hobbled state finances, Business Insider reported. The case stems from Argentina's 2002 default on about $100 billion, which has weighed on Latin America's No. 3 economy by locking it out of the global bond market at a time of stagnant growth and high inflation.

As a virtual monopoly in a country with some of the most promising offshore oil reserves in the world, Petrobras has a web of relationships with most of the global leaders in the sector, the Financial Times reported. Those linked to the growing scandal, which some estimate cost Petrobras up to $20bn, will potentially face scrutiny not only from Brazilian investigators but also from the US Securities and Exchange Commission and Department of Justice.

Michelle Bachelet, Chile’s president, swept back to power in 2013 on the back of pledges to fight inequality and put an end to the deeply entrenched privileges enjoyed by the country’s traditional elite, the Financial Times reported. So her government’s credibility took a serious blow when the single mother’s eldest son, Sebastián Dávalos, was earlier this month accused of using his influence to secure a bank loan. The ensuing uproar was such that he was forced to resign last week as head of a charitable foundation normally run by Chile’s first lady.

Creditors of Eneva SA stand to lose as much as 65 percent of their investment in the Brazilian power producer as part of a bankruptcy protection plan unveiled on Thursday. Rio de Janeiro-based Eneva, which in December filed for protection from creditors after failing to honor part of 2.33 billion reais ($822 million) in debt, offered a lump sum of 250,000 reais to each unsecured creditor, according to a securities filing. Creditors who accept the largest discounts will be given top priority when it comes to repayments, the filing said.