Argentina is hiking interest rates and devaluing its currency in a bid to reassure markets as assets went into free fall Monday after a populist who vowed to burn down the central bank won surprisingly strong support in a primary vote, Bloomberg News reported. The government rushed to devalue its official exchange rate as much as 18% to around 350 pesos per dollar and hiked its key rate by 21 percentage points to 18% in a drastic policy shift as it runs out of funds to defend its currency.

Chile's central bank could consider interest rate cuts of 75 or 100 basis points at its next meetings, minutes from the board's July meeting showed on Monday, while also cautioning that inflation remained high, Reuters reported. The bank's board voted unanimously in July to cut the benchmark interest rate by 100 basis points to 10.25%, although some board members expressed concern about the move, according to the minutes.

Chile's benchmark interest rate will likely come down to between 7.75% and 8% by the end of the year, as expected by analysts, the country's central bank chief said on Thursday, Reuters reported. Chile's central bank was one of the first in Latin America to cut interest rates during the current monetary policy cycle, slashing the rate from 11.25% to 10.25% at the end of July. However, the 100-basis-point cut is not indicative of future rate moves in Chile, central bank chief Rosanna Costa cautioned, speaking at an event.

Argentina’s best chance of making a comeback from the brink and taming spiraling inflation is the economy minister who’s overseen it all, Bloomberg News reported. Sergio Massa, who’s running for president in an October election, is one of the most pro-market politicians within the ruling leftist coalition, according to Hans Humes, a longtime investor in the nation’s sovereign bonds and the chief executive of Greylock Capital Management.

Brazil's retail sales ended the first half of 2023 in positive territory when compared with the previous year but saw its expansion lose steam since January as high interest rates bite Latin America's largest economy, Reuters reported. Sales came in stable in June versus the previous month, government statistics agency IBGE said on Wednesday, below expectations of a 0.4% increase from economists polled by Reuters.

Chile’s annual inflation eased broadly in line with forecasts in July, a month that ended with the central bank delivering a larger-than-expected interest rate cut and indicating more big reductions to come, Bloomberg News reported. Consumer prices rose 6.5% from a year prior, just above the 6.4% median estimate of analysts in a Bloomberg survey. Monthly inflation stood at 0.4%, the national statistics institute reported on Tuesday. A closely-watched price gauge that excludes volatile items increased 8.5% in 12 months and 0.3% from June.

Brazil’s central bank said a faster pace of interest rate cuts is unlikely after it kicked off an easing cycle with a bigger-than-expected reduction of 50 basis points, Bloomberg News reported. “The Committee judges that there is low probability of an additional intensification in the pace of adjustment,” central bankers wrote in the minutes of their Aug. 1-2 meeting published on Tuesday.

Argentina’s peso fell to a record low in the parallel market as the nation braces for volatility ahead of key primary elections Sunday, Bloomberg News reported. The parallel exchange rate, known locally as the blue-chip swap, weakened as much as 1.7% to around 591 pesos per dollar Monday. Argentina’s official exchange rate dropped as much 1.4%, the most intraday since September 2020, bringing the gap between the two to more than 109%.

Brazil analysts cut their interest rate forecasts for this year and next after central bankers launched a monetary easing cycle with a bold half-a-percentage point cut last week, Bloomberg News reported. The benchmark Selic will fall to 11.75% by December, down from the prior estimate of 12%, according to a weekly central bank survey of economists published Monday. Analysts cut their key rate forecast for next year to 9%. Consumer price estimates for this year were left unchanged at 4.84%. Annual inflation will slow down to 3.88% in 2024 and 3.5% in 2025.

Venezuela’s opposition is finalizing an agreement with international creditors to extend a legal deadline on $60 billion of defaulted bonds, according to people with knowledge of the plan, Bloomberg News reported. The agreement being drafted by the opposition-led National Assembly — which is recognized in the US as the country’s legal representative — would suspend an upcoming statute of limitations on the debt. The offer could be approved by the National Assembly to present to bondholders as soon as this week, according to two of the people.