South America

Argentina’s inflation sped up more than expected in January as price controls prove ineffective, further complicating the government’s strategy ahead of presidential elections later this year, Bloomberg News reported. Consumer prices rose 98.8% from a year earlier, more than the 98.6% median forecast from economists in a Bloomberg survey. Prices gained 6% from December, the second straight month of faster increases, according to government data published Tuesday. Higher costs of recreation, housing and communication propelled increases in January on a monthly basis.

Credit cards are becoming increasingly useless in Venezuela because of high inflation and government restrictions, hurting people already struggling to meet daily needs on low salaries, banking industry sources, analysts and consumers said, Reuters reported. The country's government imposed strict lending requirements during Venezuela's economic collapse - allowing banks to lend a maximum of 27% of their cash flow - sending local business owners abroad to seek loans.

Cut off from global credit markets, Argentina’s government is selling ever more local currency bonds, amassing a debt load that already totals 33 trillion pesos ($174 billion) and is rising almost exponentially, Bloomberg News reported. In one week, the Treasury will seek to roll over 300 billion pesos of debt, offering higher interest rates and shorter maturities to entice investors as they have in each of the previous four months.

Brazilian hedge fund manager SPX Capital is among asset management firms taking the lead in a group of local bondholders of troubled retailer Americanas SA organizing for restructuring negotiations, Bloomberg News reported. SPX, XP Asset Management, Riza, Icatu Vanguarda, Prada, Moneda and Exes were appointed as members of the committee that will represent a group of holders of the firm’s domestic debt, according to a document reviewed by Bloomberg. The group also approved hiring law firm E.Munhoz Advogados as its legal adviser, according to minutes from a Feb. 6 meeting.

Brazil’s economic team is considering an early review of the country’s inflation targets in an attempt to defuse tensions between the central bank and President Luiz Inacio Lula da Silva, who has been publicly pushing for higher goals and lower interest rates, Bloomberg News reported. Local assets tumbled on the report, with the real leading losses among emerging markets, as investors didn’t count on the possibility of an imminent change to inflation targets.

Three months after crypto exchange FTX collapsed, Argentina’s government is weighing creating oversight requirements on crypto companies, Bloomberg News reported. The country’s local regulator, known as the CNV, is studying launching requirements on crypto companies, such as proof of solvency, said the people, who asked not to be named discussing the plans. The CNV is planning as it awaits a congressional vote that could give it oversight authority of the crypto sector in coming weeks. “The regulation will focus on exchanges, not tokens.

A $4 billion accounting shortfall would typically raise alarm bells for an auditor. Somehow, a PricewaterhouseCoopers LLP affiliate didn’t catch it at Americanas SA, Bloomberg News reported. Investor and consumer groups are calling for closer scrutiny of the accounting firm after the unveiling of balance-sheet irregularities that led 93-year-old Brazilian retailer Americanas to seek protection from creditors last month. The gap came in part from supplier financing that wasn’t reflected the right way in the company’s financial statements, which have been audited by PwC since 2019.

Brazil's central bank has expressed concern at increased inflation expectations, saying that a fiscal framework revision and government stimulus package may lead to upward pressure on consumer prices, Reuters reported. In the minutes of its Jan.31 - Feb.1 meeting, when the rate-setting committee kept the benchmark rate at 13.75%, some committee members noted that the fiscal package presented by the Finance Ministry should mitigate the fiscal risks. Nonetheless, "it will be important to monitor the challenges for its implementation," the minutes added.

Top Brazilian banks that are creditors of distressed retailer Americanas SA plan to go after personal assets of billionaires who are the firm’s biggest shareholders: Jorge Paulo Lemann, Marcel Telles and Carlos Sicupira, Bloomberg News reported. The firms will make the move if the billionaires don’t rescue the company with combined capital injections of at least 15 billion reais ($3 billion). The billionaires have offered no more than 6 billion reais.

Oi SA, the distressed Brazilian telecom operator, asked a court to shield it from creditors ahead of a major debt payment, in what may lead to a second bankruptcy protection process in seven years, Bloomberg News reported. The company, which underwent one of the largest corporate restructurings in Brazil’s history — that began in 2016 and ended just last year — said it needs urgent help to fend off creditors, according to a filing to a Rio de Janeiro court seen by Bloomberg News. The company confirmed the request for a preliminary injunction on Thursday.