Consumer prices fell in November in Chile by 0.2% and inflation in the 12 months to November stood at 3.6%. The strong peso and lower fuel prices have pushed up imports and increased domestic competition. The central bank is expected to keep interest rates unchanged this month, as a result of the lower inflation figures.
Category: Daily Brief
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Latin America Top Local Currency Debt Issuer
Latin American countries were the top issuers of local currency debt in the third quarter of 2005, thanks mainly to Brazil. The Bank for International Settlements (BIS), which publishes the figures of local currency issues in international markets, noted that Brazil’s real-denominated offering in September, worth $1.5 billion, accounted for most of the region’s total local-currency international issuance of $2 billion.
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Brazil Seventh Currency Swap Auction
Brazil has carried out its seventh currency swap contracts auction since November in a continuing bid to get rid of excess dollars in the market. The central bank sold 11,300 currency swap contracts, worth $541.2 million, maturing between 2006 and January 2008. Brazil has sold just over $3 billion of currency swap contracts since 18 November when it resumed selling the instruments after an eight-month break. Despite the announcement of the sale yesterday, Monday, the real continued to strengthen against the US dollar, driven by increased investment and trade flows.
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Buenos Aires Debt Swap Take-up 80%
The $2.9 billion debt swap announced at the beginning of November by the Province of Buenos Aires has been well received by investors who have taken up 80% of the offer, according to officials. The offering period closes in two weeks’ time and is expected to achieve a 90% uptake.
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Chávez: Path Opens For Reelection Bid
President Hugo Chávez’s party, Movimiento V República, has won a resounding majority in Venezuela’s parliamentary elections on Sunday. Movimiento V República increased its 86 seats to 114; together with other pro-Chávez parties, it gained all the 167 seats in Congress. This majority allows Chávez to proceed with constitutional changes that will allow him to run for a further presidential term next year. Critics of the government have questioned the legitimacy of the elections after the five main opposition parties boycotted the election as did 75% of the registered voting population.
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Chile Growth Slows In October
Chile’s GDP expanded at a slower rate in October than in the previous two months as mining production dropped. Year-on-year growth was 4.9%, compared with 5.4% in September. Analysts say it is likely that with a fall in consumer prices last month, the central bank will not raise interest rates in December. This would be the first time since July that rates remained unchanged.
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Peru: Government Names Election Candidate
Jeanette Enmanuel has been named the presidential candidate of Peru’s ruling party Perú Posible for the upcoming elections next April. Enmanuel, who owns a natural medicines business – Santa Natura, has gone on record as saying she will not draw a presidential salary if elected. The businesswoman, who has no experience of politics, also said she would reduce the salaries of the national legislators.
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Scotiabank Buys Banco Wiese Sudameris
Canadian Scotiabank has bought Peru’s third-largest bank, Banco Wiese Sudameris, from controlling shareholder — Italy’s Intesa in a private deal. The sale ends months of speculation regarding prospective investors. It is not yet known what Scotiabank paid for the Peruvian entity. Scotiabank is the third-largest in Canada in terms of assets. It also holds a minority stake in local Banco Sudamericano and controls Scotiabank Inverlat in Mexico.
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Peru To Issue $832 Million Debt
Meanwhile, Peru is planning to tap the domestic and international debt markets before Christmas to raise up to $832 million. The bonds are expected to have maturities of between 15 and 20 years. The money will be used to settle its debt with Japan Peru Oil Corporation (Japeco) arranged in the 1970s to build an oil pipeline for state-owned PetroPeru. The international tranche of the sovereign issue will be arranged by Citigroup Global Market Inc.
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Venezuela Chávez Landslide In Parliamentary Elections
President Hugo Chávez’s coalition, headed up by his Movimiento V República party, was expected to win a landslide in Sunday’s parliamentary elections and gain a two-third’s majority of the 167 seats. A majority in Congress would clear the way for Chávez to make constitutional changes and stand for reelection next year. Turn out was low in the middle-class areas that are traditionally non-Chavistas as five of the opposition parties boycotted the elections citing unfair conditions and unsafe electoral procedures. Voters elected a further two lawmakers this time as the seats in Congress were expanded to reflect the country’s increased population.