South America

Brazil Bank Lending Grows 1.6% in August

Outstanding loans in Brazil kept growing in August, according to central bank data on Wednesday, with credit showing robustness despite rising costs amid an aggressive monetary tightening, Reuters reported. Outstanding loans were up 1.6% in August from the month before to 5.067 trillion reais ($940.48 billion). In July, outstanding loans rose 0.6%, a figure that had not yet been released by the central bank, which is still normalizing its data after a strike by its employees earlier this year.
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Chile estimates it will issue $12 billion in total debt next year and the largest budget increases will be in social protection and science and technology, Finance Minister Mario Marcel told Reuters on Thursday. "So we're cutting (issuance) by half, reflecting the fact that we will have an overall balance that will be considerably stronger than what people thought we would have," said Marcel, adding most of it will be to refinance maturing issues. The minister is confident Chile will soon make a dent on inflation, running at double digits.
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The International Monetary Fund (IMF) has reached a staff-level agreement on Argentina's $44 billion extended fund facility arrangement, which should unlock nearly $4 billion in funds for the country, the lender said on Monday, Reuters reported. The approval, which needs to be ratified by the IMF executive board, would unlock $3.9 billion for the embattled South American nation, which is looking to rebuild reserves and tamp down spiraling inflation. Argentina, a major grains producer, struck a new IMF deal earlier this year to replace a huge failed program from 2018.
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Argentina will stick to a deal with the International Monetary Fund to gradually reduce the country’s budget deficit amid a surge in inflation, the country’s top economic official said on Monday, WSJ Pro Bankruptcy reported. Economy Minister Sergio Massa met with IMF Managing Director Kristalina Georgieva in Washington, D.C., and they said the IMF’s program with Argentina would remain unchanged. Ms. Georgieva said she welcomed Mr. Massa’s “strong commitment and drive to achieve the goals of the program.” Mr.
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Peru's finance ministry on Thursday unveiled an economic package it says can help lift the economy at times of a global slowdown and falling copper prices, which are key to the country's economy, Reuters reported. Finance Minister Kurt Burneo said the measures could boost gross domestic product growth by 0.6% this year and by 0.8% in 2023. The announcement comes just weeks after Peru's finance ministry announced economic growth projections that exceeded analysts consensus. The ministry expects GDP growth of 3.3% this year, while analysts polled by Refinitiv forecasts 2.6%.
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Brazil's central bank chief Roberto Campos Neto said that policymakers aren't focusing on monetary easing at the moment as the priority remains on bringing back inflation to the official target, Reuters reported. "We've been communicating that we don't look, don't think about falling interest rates at this moment," Campos Neto said late on Monday in a speech at an event hosted by the Valor Econômico newspaper. "We think about finishing the work. Finishing the work means converging inflation," he said.
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LATAM Airlines yesterday turned back two challenges to its bankruptcy reorganization plan, putting the carrier a step closer to emerging from chapter 11 after seeking protection from creditors in the early months of the pandemic, Reuters reported. LATAM said in a statement it was pleased by a U.S. bankruptcy court's decision confirming its reorganization plan in which two groups of creditors lost their appeals. LATAM, which filed for bankruptcy in 2020, won court approval to exit chapter 11 in June.
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Brazil's government debt fell to its lowest level since the start of the coronavirus pandemic amid favorable fiscal data, central bank data showed on Wednesday, Reuters reported. The country's debt as a share of gross domestic product dropped to 77.6% in July, from 78% in June, the lowest figure since March 2020, when it reached 77.03%. At the peak of the spending spree to fight the pandemic, the indicator reached 89% of GDP.
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Brazil posted a current account deficit of $3.5 billion in May, the worst result for the month in eight years, amid trade balance weakening, central bank figures showed on Friday, Reuters reported. A strong commodities producer, Brazil has seen its exports grow, but imports have increased at a faster pace, driven by higher prices for products such as fuel and fertilizers. In May, the trade balance surplus was $3.4 billion, down 53.3% over the same month last year.
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Bond issuances by companies in Colombia plunged nearly 50% in the first half of the year due to rising financing costs, Fitch Ratings said on Thursday, Reuters reported. "Rising inflation and a revised monetary policy resulted in a large increase in financing costs, conditions that kept companies from issuing new debt," the agency's senior analyst, Juan David Medellin, said in a report. Annual inflation in Colombia is at its highest level since April 2000, according to data published by the National Department of Statistics (DANE), reaching 10.21% in annual terms at the end of July.
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