South America

Colombia’s slowing inflation and weak economy call for more aggressive interest rate cuts, though policymakers must remain vigilant to potential risks ahead, according to a member of the central bank’s board, Bloomberg News reported. The fact that inflation has been above target for the past three years demands prudence, even after it eased in February to the slowest pace in nearly two years, central bank co-director Bibiana Taboada said in an interview.

The highest bid received in a U.S. auction of shares that will decide the fate of Venezuela-owned oil refiner Citgo Petroleum was $7.3 billion, enough to cover only a third of court-approved claims, Reuters reported. A federal court in Delaware is auctioning the shares of a parent of Venezuela's foreign crown jewel, Houston-based Citgo, that it found liable for the South American country's debt defaults and expropriations. Creditors have flocked to Delaware to press claims totaling $21.3 billion in a case first brought nearly seven years ago by miner Crystallex.

President Luiz Inacio Lula da Silva’s plan to help Brazilians escape the record amounts of debt they amassed during the pandemic remains well short of its targets as it approaches its March 31 expiration, denting his efforts to unleash consumer spending and boost growth in Latin America’s largest economy, Bloomberg News reported. Desenrola, as the program is known, was expected to help as many as 70 million people, including 30 million with lower incomes and smaller debts.

Brazil's Finance Ministry is expected to present a proposal on debt service for states that represents a middle ground in the debate amid calls for reduced burdens, Sao Paulo Governor Tarcisio de Freitas said on Wednesday, Reuters reported.

The Latin American high-yield bond rally that started in El Salvador and expanded to Venezuela, Argentina and Ecuador has now swept up Bolivia in its wake. That’s a step too far for some investors, Bloomberg News reported. El Salvador gained after unexpectedly meeting all its debt payments, while Venezuela rallied after the US lifted sanctions. Ecuador and Argentina jumped as they imposed radical free-market reforms following years of mismanagement.

Brazil is putting the finishing touches on a rescue plan for its troubled airlines, as President Luiz Inacio Lula da Silva’s government confronts a challenge the US and Europe dealt with much sooner after the pandemic, Bloomberg News reported. The package, to be announced in coming days, will use public funds as collateral for loans to struggling carriers from the country’s development bank, according to a person familiar with the matter. But the plan is still in flux and it’s expected to be more of a band-aid solution than an industry cure-all.

Argentina’s central bank isn’t offering put options for peso bonds the government is selling this week in a record debt swap, a move that’s discouraged private banks from participating in the deal, Bloomberg News reported. The decision not to include puts — pledges to buy back bonds if they fall below a certain price — is key because they’re one of the main tools to persuade banks to swap peso bonds maturing this year for new notes that stretch between 2025 and 2028, the people said.

Brazil's consumer prices rose slightly more than expected in February, reaching the highest monthly figure in one year driven by increased education prices, government statistics agency IBGE said on Tuesday, Reuters reported. Inflation, measured by the IPCA index, was at 0.83% last month compared with January. Education prices rose 4.98% in the month, responsible for 0.29 percentage points of the data as schools and universities hike tuition fees at the start of the year. Food and beverage prices also contributed to the results, IBGE said.

Agricultural powerhouse Brazil is harvesting one bumper crop after another. Yet, growers are going bankrupt at an alarming rate, dealing a blow to investors in the fast-growing $7 billion market for agribusiness funding, Bloomberg News reported. Tumbling corn and soybean prices are sparking defaults, undermining returns for so-called Fiagros, the Brazilian investment funds backed by agricultural receivables such as interest, dividends and land-lease payments.

Argentina is starting a record swap of peso-denominated debt Monday in a bid to roll over almost all of its 2024 maturities into the next four years, providing a temporary respite to President Javier Milei’s government, Bloomberg News reported. The economy ministry published late Friday a list with the bonds it seeks to repurchase and sell, saying it will receive offers from investors until Tuesday 3 p.m. in Buenos Aires (2 p.m. ET). The swap may amount to 55 trillion pesos ($65 billion), according to Juan Manuel Truffa, partner and director at local consulting firm Outlier.