South America

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Paraguay will end 2021 with inflation of 6.8%, well above the official target and the highest rate since 2010, driven by food and fuel price increases, the central bank said on Thursday, Reuters reported. Last year consumer prices in the country rose 2.2% and the official goal for 2021 was to end the year with a 4% rise. In 2010, inflation was 7.2%. Fuels soared almost 30%, beef 18% and flour 16% in 2021, according to a report from the bank, which did not register increases in consumer prices during the month of December.
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Creditors of Brazilian iron ore pellet-producer Samarco Mineração rejected the company’s proposal to restructure its debt under a bankruptcy protection plan, mining giant Vale said in a statement, bnamericas.com reported. A 50/50 joint venture between Vale and BHP, Samarco filed for bankruptcy protection earlier this year to avoid early payment to some bondholders in an effort to preserve its cash flow and resume full production. The company currently has debts of 50bn reais (US$8.8bn), of which 26bn reais are in outstanding bonds and 24bn reais are owed to Vale and BHP.

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Brazil's central bank has put the brakes on tougher regulations for the burgeoning fintech industry, withdrawing a draft proposal that had been set to be voted on last month by the government's top financial policy-making body, four sources familiar with the matter told Reuters. On Nov. 18, the central bank proposed that the regulations be discussed at an extraordinary meeting of the National Monetary Council (CMN) but the new rules - which look to level the playing field between fintechs and traditional banks - were never voted on, the sources say.
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Latam Airlines Group SA’s official low-ranking creditor group is unhappy with the Chilean carrier’s bankruptcy exit proposal, arguing a sale to rival Azul SA could leave its members much better off, Bloomberg News reported. In court papers filed on Wednesday, Santiago-based Latam’s unsecured creditor committee said the airline’s current reorganization plan is so unfair that it can’t win court approval. It flouts U.S. bankruptcy rules by favoring some evenly-ranked creditors over others and giving value to shareholders that don’t deserve it, lawyers for the group wrote.
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Peru's economy grew 4.55% year on year in October, the government statistics agency INEI said on Wednesday, as the world's second-largest copper producer saw a slowdown in growth after the economy recovered to pre-pandemic levels, Reuters reported. The growth level is the lowest since March and in line with a forecast from the central bank, which said on Friday that economic growth was likely to have lost steam and grow between 4% and 6%. INEI added that Peru's economy had grown 15.99% in the first ten months of the year.
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Peru's economy is likely to have lost steam in October, the central bank said on Friday, estimating it would have grown between 4% and 6% in the period, the lowest rate since March, when the economy started rebounding from the pandemic, Reuters reported. Economic expectations from the business sector have also deteriorated, the bank's head of economic studies, Adrian Armas, said in a conference call. Peru on Thursday lifted its benchmark interest rate for the fifth month in a row, to 2.5% from 2%, amid persistent inflation.
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Avianca, one of Latin America’s largest airlines, is emerging from bankruptcy protection after winning court approval for its reorganization plan a year and a half after the Covid-19 pandemic decimated the region’s air carriers, Bloomberg News reported. Avianca, which is headquartered in Bogota, said it is exiting the restructuring process after raising fresh investments of $1.7 billion. It also comes out of bankruptcy with “significantly” reduced debt and more than $1 billion of liquidity, the company said in a regulatory filing.
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Brazil’s economy fell into recession as extreme weather conditions, high interest rates and inflation cut short its recovery from the pandemic, dealing a blow to President Jair Bolsonaro just as he prepares for his re-election campaign, Bloomberg News reported. Gross domestic product fell 0.1% in the July-September period after posting a revised decline of 0.4% in the second quarter. From a year ago, the economy expanded 4%, the national statistics agency said on Thursday. The downturn shows mounting challenges for Latin America’s largest economy.
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Brazilian airline Azul SA confirmed on Monday that it made an offer earlier this month to combine with Chile’s LATAM Airlines Group , which is in bankruptcy proceedings, but said it had since decided to focus on its own operations, Retuers reported. In an exchange filing published late on Sunday, Azul said that it would consider potential partnerships only in the future. The Brazilian airline said its non-binding proposal submitted on Nov. 11 had included around $5 billion in equity financing and was backed by some creditors of LATAM.
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Chile's LATAM Airlines Group SA said on Friday that it has filed a reorganization plan, proposing an $8.19 billion infusion of capital into the group, in a bid to exit its chapter 11 protection, Reuters reported. The financing proposal will include a mix of new equity, convertible notes and debt, the group said in a statement, adding that it intends to launch an $800 million equity rights offering to shareholders, upon confirmation of the plan.
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