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Argentina: Argentin strikes deal with creditors, setting stage for crucial negotiations with IMF. On 4 August, the Argentinian government re...

Latin America: News In Focus




Argentina: Argentin strikes deal with creditors, setting stage for crucial negotiations with IMF. On 4 August, the Argentinian government reached an agreement with its biggest creditors to restructure around USD 65 billion in foreign debt. The deal would allow Argentina to avert default, setting the stage for negotiations with the IMF over a loan arrangement struck by the previous administration in 2018. However, daunting economic challenges remain.


Brazil: Manufacturing PMI hits record high in July. The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, jumped to 58.2 in July from 51.6 in June, marking the strongest reading since records began in February 2006, amid the continued lifting of coronavirus-induced restrictions.


Brazil: COPOM axes SELIC rate to new record low in August At its 4–5 August meeting, the Central Bank of Brazil’s Monetary Policy Committee (COPOM) unanimously voted to cut the benchmark SELIC interest rate by 25 basis points, taking it to a new record low of 2.00%. The move marked the ninth consecutive cut since July 2019.


Chile: Contraction in economic activity softens but remains sharp in June. In June, the IMACEC economic activity index fell 12.4% on an annual basis, beating market expectations of a sharper 14.5% dive and following a 15.3% contraction in May which had marked the largest drop on record.


Chile: Central Bank leaves monetary policy rate at technical minimum and maintains unconventional stimulus in July At its monetary policy meeting on 15 July, the board of the Central Bank of Chile (BCCh) left the monetary policy rate unchanged at 0.50%, its lowest point since 2009. The decision, which was unanimous, came in line with analysts’ expectations and included the continuation of unconventional liquidity measures.


Colombia: BanRep cuts policy rate to new record low in July On 31 July, Colombia’s Central Bank (BanRep) decided to cut the benchmark interest rate by 25 basis points to a new record low of 2.25%. The move matched market analysts’ expectations and marked the Bank’s fifth consecutive cut.


Mexico: GDP contracts at record place in Q2 as Covid-19 ravages activity. According to a preliminary reading, GDP collapsed 18.9% yearon-year in Q2, more severely than the 1.4% contraction tallied in Q1. The heavy contraction was due to the suspension of nonessential activities during April and May as part of the measures enforced to contain the spread of Covid-19.


Peru: Economic activity drops heavily in May. Economic activity tumbled 32.8% year-on-year in May. Despite being a smaller contraction than April’s historic 40.5% decrease, May’s reading was still the second largest fall in activity on record.

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