South America

The sell-off in the Argentine peso intensified on Friday, with the currency once again approaching record lows following another big drop at the market open, the Financial Times reported. The peso tumbled 4.7 per cent to hit 41.15 per dollar, knocking out its previous closing low of 39.79 and putting it just a hair away from the all time intraday low of 41.36 reached on August 30. The sharp drop follows Thursday’s 2.8 per cent decline and comes despite the IMF agreeing on Wednesday to increase its bailout package to the Latin American country by an extra $7.1bn.
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Embraer SA will have the right to block ten crucial matters in the commercial-aircraft joint venture it’s forming with Boeing Co, according to a Memorandum of Understanding between the two companies, Bloomberg News reported. The document was made available via the website of the Sao Jose dos Campos Metalworkers Union on Sept. 21 after the Labor Prosecutor’s Office requested a copy of the MoU under judicial confidentiality and made it public…Embraer’s American Depositary Receipts reversed earlier gains after the MoU was reported and were trading down 0.3 percent to $19.72 at 2:08 p.m.
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Ecuador’s fiscal discipline is making investors forget about its history of defaults, according to Finance Minister Richard Martinez. The 38-year-old economy chief said his emphasis on budget cuts, transparency and communication since taking office in May is luring foreign fund managers to the nation with the dubious distinction of having the second-most defaults in the world since 1800, Bloomberg News reported. Ecuador’s yield spread over U.S. Treasuries has fallen to 620 basis points, briefly dropping below Argentina for the first time since 2015.
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Argentina won a promise of extra cash and faster delivery from the International Monetary Fund, which expanded a record bailout to help the country defend its currency and pull the economy out of recession, Bloomberg News reported. Argentina’s credit line will increase to about $57 billion over three years, from the $50 billion announced in June. The Fund will also deliver more of that cash up front. Argentina has already received $15 billion and will have access to another $35 billion by the end of 2019.
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Argentine Central Bank President Luis Caputo resigned on Tuesday, a day after President Mauricio Macri said a revised aid deal with the International Monetary Fund would require a new approach to monetary policy, Bloomberg News reported. Just three months since moving to the central bank from the nation’s finance ministry, Caputo cited "personal issues" as the reason for his departure. He was immediately replaced by Economy Minister Nicolas Dujovne’s deputy, Guido Sandleris.
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Cardboard box-maker Smurfit Kappa has decided to deconsolidate its troubled Venezuelan operations from its balance sheet, after losing control of the unit to the local government, which will result in the writedown of its €60 million of net assets, The Irish Times reported. The move comes a month after the Caracas government decided to seize Smurfit Kappa Carton de Venezuela (SKCV) for 90 days amid complaints about prices that the company was charging for its products in an alleged abuse of its dominant market position – at a time when the country is grappling with hyperinflation.
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Argentine President Mauricio Macri said a revised agreement with the International Monetary Fund will help shore up investor confidence in the nation after a currency rout pushed South America’s second-largest economy into recession, Bloomberg News reported. “We are working with the IMF and we are going to present something that will bring confidence,” Macri said in an interview with Bloomberg TV in New York.
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A Rio de Janeiro appeals court has determined that billions of dollars in fines owed to regulators by Brazil’s Oi SA will be included in the company’s bankruptcy recovery package, a ruling showed on Wednesday. Oi, Brazil’s largest fixed line telecom company, entered bankruptcy in 2016, and in late 2017 creditors approved a plan to convert billions of dollars of debt into fresh equity, Reuters reported.
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Brazil’s Natura Cosmeticos SA recently approached Avon Products Inc. about a takeover, according to people familiar with the matter. The companies aren’t in serious talks and Avon, which has received other expressions of interest, is focused on turning itself around and reviving its shares, one of the people said. Following years of decline in its once-formidable direct-sales business, Avon had a market value as of Monday’s close of just $900 million, The Wall Street Journal reported.
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Brazil's state-run oil giant Petróleo Brasileiro SA aims to raise output as much as 10 percent to around 2.3 million barrels per day (bpd) in 2019 and cut net debt by $10 billion (7.62 billion pounds), Chief Financial Officer Rafael Grisolia told Reuters. The world's most indebted oil company is on course to reduce debt to $69 billion by the end of this year despite falling short of its $21 billion asset sales target, Grisolia told Reuters in an interview in New York late Friday.
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