Chile’s Central Bank increased its benchmark lending rate by 25 basis points to 3%, a two-year high. Central bankers said they expect to continue raising rates. International risks to the economy have increased and oil prices probably will impact inflation in the short term, the bank said. Economists expect rates to increase to 4% by year-end, according to a Central Bank survey.
Category: Daily Brief
Posted inDaily Brief
Profits Rise at Walmex
Wal-Mart de México boosted profits by 35% in the first quarter, thanks to Mexico’s biggest surge in consumer spending in four years. Net income rose to $166 million. March same-store sales rose 9.5% versus a decline of 2.7% a year earlier. Retail sales rose more than 6% a month between September and January. Walmex wants to open 70 new stores this year.
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Chile’s Consumer Prices Jump
Chile’s consumer prices climbed in March at the fastest pace in two years as rising oil prices boosted transport costs. Prices jumped 0.6 percent from February, the first increase in four months, raising inflation to 2.4 percent in the last 12 months. The report sparked speculation that Chile’s central bank would raise its benchmark lending rate again this week.
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Scotiabank Sues Argentina
Canada’s Scotiabank is demanding $600 million in compensation from Argentina in a suit filed under the United Nations Commission on International Trade Law. Scotiabank claims government policies in the 2001-2002 financial crisis forced it to close its subsidiary Scotiabank Quilmes, later sold to local investors. Scotiabank’s claim for arbitration is one more than 100 pending against Argentina.
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Congress Votes Against AMLO
Mexico’s lower house of congress voted 360 to 127 to remove Mexico City Mayor Andrés Manuel López Obrador from office to face charges of disobeying a court order, which could derail his 2006 presidential bid. López Obrador called on his supporters to peacefully resist what he called an unjust, politically motivated attempt to derail his presidential campaign. He specifically accused President Vicente Fox of conspiring to block his candidacy. Yields on Mexico’s ten-year dollar bonds have widened out by 100 basis points since hitting a record low on February 10th.
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Venezuela’s GDP Jumps
Venezuela’s GDP jumped 11.2 percent year-on-year in the first quarter, led by gains in manufacturing, telecommunications, transportation services and energy. Central Bank chief Domingo Maza Zavala predicted the country would achieve growth of between 5.0 and 8.0 percent this year. The country registered a record-high economic growth of 17.3 percent in 2004.
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ConocoPhillips Given License
As part of an agreement ending a dispute on Venezuela’s Corocoro oil field project, state oil firm PDVSA will award ConocoPhillips a natural gas exploration license in the area. ConocoPhillips agreed to a 16.7% flat royalty in February, which is higher than the amount specified in its original agreement. Venezuela’s oil minister Rafael Ramirez has said that PDVSA will revise several agreements with foreign energy firms because their conditions are financially detrimental to PDVSA.
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PEOPLE 2005
The Brazilian government has confirmed Elifas Gurgel do Amaral, 49, as president of Anatel, the federal telecom regulatory agency. Gurgel, an engineer and reserve army colonel, had taken over on an ad hoc basis in January. He is a close ally of Communications Minister Eunício Oliveira and member of the PMDB party, a member of the ruling coalition. The government picked Gurgel over senior career Anatel officials, despite opposition from Finance Minister Antonio Palocci and telecom operators concerned that nominally independent Anatel is losing its autonomy. Brazil has one of the largest and fastest-growing telecom markets in the developing world.
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Ecuador Rejects Reform Package
Ecuador’s congress overwhelmingly rejected 68-3 government draft legislation giving the private sector a greater role in the state-run pension system and government-controlled oil industry, improving the quality and structure of the country’s public finances. President Lucio Gutiérrez fired the entire Supreme Court in December, poisoning relations with the opposition-dominated congress.
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EFE Issues Bonds
Chile’s state-owned railway company Empresa de Los Ferrocarriles del Estado (EFE) plans to issue bonds worth $102 million on April 7. The bonds will have an interest of 5.2 percent and will mature in 30 years. The debt is guaranteed by the Chilean government and is rated AAA by Fitch Ratings.