South America

Brazil's central bank still has further interest rate hikes to make as inflation remains in double digits, Monetary Policy Director Bruno Serra said on Wednesday, reinforcing policymakers' will to extend aggressive monetary tightening, Reuters reported. During an online event hosted by Modalmais bank, Serra said that considering current risks, especially those related to the country's fiscal prospects, 2023 inflation is now seen above the target, forcing authorities to keep a hawkish stance. "The battle is still far from won, we still have double-digit inflation.

Colombia launched a series of measures seeking to curb the fastest inflation in five years, largely from increases in food prices, the nation’s finance minister said, Bloomberg News reported. Minister Jose Manuel Restrepo announced a package of measures after inflation accelerated in January, more than doubling its 3% target. Restrepo spoke on Sunday alongside the agriculture and transport ministers, among other high-level officials, after a meeting with President Ivan Duque, according to a video from the administration.

The International Monetary Fund is focused on getting Argentina to make economic changes to curb runaway inflation and wants a plan to increase tax revenue and improve public spending in a staff-level agreement with the nation, Bloomberg News reported. The IMF recognizes that the program being worked out after an initial understanding was reached last week needs to have broader support from society, a lesson learned from the deal that collapsed in 2018, Managing Director Kristalina Georgieva said Thursday.

Ecuador expects to pull together a trade deal with China at the end of this year and will begin formal debt re-negotiations with the Asian country, Ecuadorean President Guillermo Lasso said on Saturday, after a Beijing visit with his counterpart Xi Jinping, Reuters reported. China became Ecuador's top lender over the last decade, with millions of dollars in long-term credit tied to the handover of crude oil, large investments in hydro-electric and mining projects and other loans. "In China we had a productive meeting with the President Xi Jinping," Lasso posted on Twitter.

Peru’s inflation slowed more than expected in January as transportation prices fell, providing a welcome relief to the central bank which faced in 2021 the fastest rise in prices in 13 years, Bloomberg News reported. Annual inflation slowed to 5.68%, compared with the 5.99% median forecast of analysts surveyed by Bloomberg. Consumer prices increased 0.04% from December, the national statistics bureau reported Tuesday. Prices for food, energy and fuel surged in Peru and across Latin America last year as the pandemic and lockdowns spurred supply-chain snarls and shortages.

Latam Airlines Group SA can send its $5.4 billion bankruptcy-exit plan to creditors for a vote, a judge said Tuesday, handing the airline a partial victory over debtholders who want to pursue alternatives, including a takeover by rival Azul SA, Bloomberg News reported. The decision means the company can seek final court approval for its reorganization plan in April and possibly exit bankruptcy several months after that, should it get support from securities regulators in Chile, where Latam is based.

Argentina and the International Monetary Fund have reached an understanding on when the nation will achieve a balanced primary budget, marking a first key step to renegotiating more than $40 billion of debt, Bloomberg News reported. The agreement comes after talks intensified in the past week following months of delays, and Argentina plans to make a payment of more than $700 million due on Friday. The parties have agreed for the country to reach a balanced primary budget -- that is, a budget without including interest payments -- in 2025.

Latam Airlines Group SA “flatly rejected” Azul SA’s offer to buy the bankrupt carrier even though the sale would be a better deal for creditors, Azul contends in new court filings, Bloomberg News reported. Azul for months has been expressing interest in a tie-up with Chile’s Latam, but the bankrupt airline has refused to seriously engage in talks, lawyers for Brazil-based Azul said in court papers. Azul said its deal outlined in a Nov. 11 term sheet values Latam at $13 billion and would provide more for creditors than Latam’s current proposal, which is on the verge of seeking court approval.

Argentina’s looming deadline to make a payment of over $700 million to the International Monetary Fund on Friday is exposing a growing divide within the ruling coalition, Bloomberg News reported. The public disagreements in the government of President Alberto Fernandez, with its more radical wing suggesting the country could default on the Washington-based organization, come as Economy Minister Martin Guzman leads negotiations with IMF staff for a new program to reschedule payments on over $40 billion in outstanding debt.

Brazil posted negative foreign direct investment (FDI) of $3.9 billion in December, the worst monthly figure ever recorded in Latin America's biggest economy, bringing the 2021 total to $46.4 billion, the central bank said yesterday, Reuters reported. The figure last month was slammed by a negative $6 billion in reinvested profits in the country, according to the central bank. In the series started in 1995, Brazil had recorded negative monthly FDI on two previous occasions - the $24 million reported in March 1995 and the $103 million in July 2016.