Chilean consumer prices unexpectedly posted their biggest monthly drop in more than a decade in December, sending swap rates tumbling and paving the way for more sharp interest rate cuts, Bloomberg News reported. Prices fell 0.5% last month, more than all estimates in a Bloomberg survey that had a -0.1% median forecast. Annual inflation eased to 3.9%, the national statistics agency reported on Monday. A closely-watched price gauge that excludes volatile items increased 5.4% in the year through December. Chile’s central bank has signaled it will deliver another big rate cut at its Jan.
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Argentine President Javier Milei is proposing a local debt swap that could top $71 billion, aiming to stabilize the country’s finances by pushing off maturities and reducing the deficit to zero, Bloomberg News reported. Economy Minister Luis Caputo and Finance Secretary Pablo Quirno told representatives of local and foreign banks operating in Argentina that they plan to issue new peso bonds in February to swap for the 2024 maturities, according to four people with direct knowledge of the meeting that took place Thursday afternoon.
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Argentina's inflation likely hovered around 30% in December, presidential spokesman Manuel Adorni said on Wednesday, when asked by a reporter about studies showing monthly inflation reaching nearly that level, Reuters reported. "We still don't have the official data, but we understand that the figure was around the one you are referring to," Adorni told the reporter during a press conference. If confirmed, that would take annual inflation in the South American country to over 200% in 2023, the highest in more than three decades. The official figure will only be released on Jan.
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Brazil posted a wider-than-expected current account deficit in November but the figure as a proportion of gross domestic product (GDP) continued to decrease, data from the central bank showed on Wednesday, Reuters reported. The current account deficit in Latin America's largest economy totaled $1.6 billion in November. Economists polled by Reuters expected a $400 million deficit. Brazil's $6.7 billion trade surplus in the month, larger than the $4.7 billion one reported a year ago, was not enough to offset an increase in the factor payment and service deficits, the central bank said.
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International Monetary Fund officials are expected in Argentina this week to start negotiating with the new government of President Javier Milei on a $44 billion program that went off track during the previous administration, Bloomberg News reported. The delegation will arrive in Buenos Aires on Thursday, presidential spokesman Manuel Adorni said during his morning news conference Tuesday, without detailing who’s coming nor how long they’re expected to stay. Milei’s cabinet chief Nicolas Posse and Economy Minister Luis Caputo will lead talks with IMF staff, according to Adorni.
Colombia President Gustavo Petro has proposed lowering the country’s corporate tax rate and increasing income taxes for its highest earners, Bloomberg News reported. The move, which he has not yet detailed, would allow companies to grow and make the tax system more just, he said in a post on X on Saturday. Petro also spoke in broad terms about the tax reform proposal in remarks broadcast Friday after he announced that the government will increase the minimum wage by 12% next year.
Argentina’s President Javier Milei is considering issuing a perpetual bond to pay a $16 billion lawsuit award stemming from the nationalization of state-run energy company YPF, Bloomberg News reported. Swinging between political jabs and policy intentions, Milei suggested that the government would issue the bond without a fixed maturity while charging Argentines the “Kicillof tax,” named after Buenos Aires Governor Axel Kicillof who spearheaded efforts to nationalize YPF in 2012.
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Creditors of distressed Brazilian retailer Americanas SA approved a restructuring plan to overhaul 50 billion reais ($10.3 billion) of debt in a key step to applying a recovery plan nearly a year after its sudden implosion due to a multi-year fraud, Bloomberg News reported. With more than 97% of banks, bondholders and suppliers represented at the virtual meeting, the creditors gave the company the green light to proceed with the plan that envisions a capital injection of 24 billion reais in 2024 and recovery rates close to 30%.
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Chile’s central bank sped up the pace of its interest rate cuts with a reduction of three quarters of a percentage point and signaled borrowing costs could fall even faster as both inflation and the global economy improve, Bloomberg News reported. Policymakers led by Rosanna Costa voted unanimously to cut borrowing costs to 8.25% late on Tuesday, as expected by 12 of 20 analysts in a Bloomberg survey. Eight others expected a second straight reduction of 50 basis points.
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Economic activity in Brazil performed worse than expected in October, central bank data showed on Wednesday, corroborating broad readings of economic cooling, Reuters reported. The IBC-Br index, a key predictor of gross domestic product (GDP), fell by a seasonally adjusted 0.06% from September. On a non-seasonally adjusted basis, the IBC-Br was up 1.54% over October 2022 and grew by 2.19% in the 12 months. Latin America's largest economy has previously prospered this year on the strength of its agribusiness and extractive industries.
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