South America

Retail sales volumes in Brazil overshoot market expectations but still posted a small decrease in August on a monthly basis, statistics agency IBGE said on Wednesday, signaling the sector remains under pressure amid high borrowing costs, Reuters reported. In Latin America's largest economy, retail sales were down 0.2% in August from July, above the median forecast of a 0.7% decrease in a Reuters poll of economists but still in negative territory. The sector has been alternating between gains and losses this year as tight monetary policy keeps sales in check.

Argentina's central bank raised the country's benchmark interest rate to 145% from 118% on Thursday, a source close to the matter told Reuters, as the South American country battles triple-digit annual inflation. The hike follows the rapid freefall of Argentina's peso, with the currency surpassing the psychological barrier of 1,000 pesos per U.S. dollar earlier this week with less than two weeks before a crucial presidential election.

Chile’s finance minister played down the impact of one of the world’s worst currency routs on inflation, saying the short-term peso weakness is unlikely to divert the central bank’s plans to cut interest rates, Bloomberg News reported. The currency slump stems from global economic factors such as the appreciation of the dollar as the Federal Reserve turns more hawkish, meaning any pressure on domestic prices will be relatively small, Mario Marcel said in an interview from the International Monetary Fund’s annual meeting in Morocco.

In the latest blow to Binance’s global ambitions, a Brazilian congressional committee has recommended the indictment of four of the company’s senior leaders, including its founder and CEO Changpeng Zhao, Bloomberg News reported. The committee, which had been conducting a probe into crypto-related ponzi schemes in Brazil, can only make suggestions. Brazilian police will decide whether to proceed with actual indictments.

Economics says it’s way past time for the International Monetary Fund to pull the plug on Argentina. Geopolitics helps explain why it hasn’t — yet, Bloomberg News reported. Over the past five years, the Fund has lent $43 billion in repeated bailouts for the Latin American nation — multiples more cash than anyone else has gotten — with dismal results. On the eve of a pivotal presidential vote, Argentina has 124% inflation and its economy is in deep recession again. The latest IMF program, like so many predecessors, has essentially collapsed.

Brazilian auto exports are set to plunge by double digits in 2023 when compared with the previous year, automaker association Anfavea said on Friday, as a severe economic crisis in neighboring Argentina hits shipments to that country, Reuters reported. The association said in a statement it now projects exports to fall 12.7% in 2023 to 420,000 vehicles, a major cut from its previous estimate of a 2.9% drop in the period. "Exports have been the major warning point for the automotive sector in the first nine months of the year," it said.

Argentina's central bank is set to leave its interest rate unchanged at 118% at the directors meeting scheduled for later Thursday, an official source at the bank said, Reuters reported. Argentina is struggling to tamp down on triple-digit inflation as presidential elections loom just several weeks away. The central bank held the rate at 118% last month after raising it from 97% in the aftermath of a shock primary election which saw radical libertarian Javier Milei become the favorite to win the presidency this month. Annual inflation is running at 124%.

Chilean President Gabriel Boric embarks on his first trip to China with an ambitious agenda that seeks deals to make the country’s economy more efficient and help it develop beyond its traditional commodities exporter role, Bloomberg News reported. “We want to move toward a new stage that includes investments in the country that help us improve productivity,” Chile International Economic Relations Undersecretary Claudia Sanhueza said in an interview ahead of Boric’s first trip to the Asian country next week.

Brazil is bringing an urgent message to next week’s meetings of the International Monetary Fund: Western-backed lenders must give developing nations more say if they want to remain relevant, Bloomberg News reported. A major redistribution of IMF quotas to correct the underrepresentation of large emerging-market economies has been a decades-old demand from Brazil and other key developing countries, but the price of inaction is growing higher, according to Tatiana Rosito, international affairs secretary at the Brazilian Finance Ministry.

Industrial production in Brazil rose slightly less than expected in August, data from government statistics agency IBGE showed on Tuesday, as the sector struggles to gather speed amid high interest rates, Reuters reported. Output was up 0.4% in August from July, IBGE said, recovering part of the losses seen a month earlier but below forecasts as the median estimate in a Reuters poll projected an increase of 0.5%.