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President Dilma Rousseff is not known for her fondness of foreign policy. But last year, the US gave her the inspiration she needed to embark on an international crusade when it was revealed that Washington was spying on her phone calls. Furious at this affront, the Brazilian leader called on the United Nations annual general assembly to push for better governance of the internet.

Next week, her ambition of creating an international civil code governing the use of the web will come a step closer to fruition as the world meets in São Paulo to discuss the issue at NETmundial – the “Global Multistakeholder Meeting on the Future of Internet Governance”. Continue reading »

Brazilian President Dilma Rousseff, under siege over late preparations for the soccer World Cup that starts in June, at last has something to celebrate.

The first of a series of major infrastructure programmes promised to the Brazilian public as part of the tournament has finally been inaugurated – or at least “the first phase of the first phase” of the project. On Wednesday, Ms Rousseff presided over the opening of a new terminal at the international airport in the capital, Brasília. Continue reading »

There is no doubt that emerging market (EM) investors have cheered up considerably of late. Following a torrid January and February, virtually all asset classes in the EM universe appear – on aggregate at least – to be gaining in value.

The bellwether stock index, the MSCI EM index, is up 9.6 per cent from its low on February 5. EM sovereign bonds are yielding an average of 5.51 per cent, down 0.37 per cent since January 1. Local currency bonds are, in many cases, producing stellar returns sharpened by windfall currency gains. Indeed, some EM currencies are among the world’s best performers, with the Indonesian rupiah rising 7.81 per cent, the Brazilian real gaining 7.3 per cent and the Indian rupee climbing 2.8 per cent so far this year. Continue reading »

Wasn’t it the case, about five years ago, that Ecuador’s foreign debt was “illegitimate” and its bondholders “real monsters”?

Well, it seems time cures everything. Rafael Correa, Ecuador’s leftwing president, said at the weekend his country was planning its first international bond issue since defaulting on $3.2bn of foreign debt in 2008 – and, six months later, buying most of it back at 35 cents on the dollar. Continue reading »

As Joe Leahy reported in Monday’s FT, the death knell is sounding for Brazil’s economic strategy. Within hours of publication, Brazil’s central bank supplied a few more nails for that strategy’s coffin in the shape of its weekly survey of about 100 market economists. The news: growth is trending down and inflation is trending up – dangerously so. Continue reading »

One of the world’s most complex foreign exchange regimes, in a country with some of the world’s cheapest petrol, is wiping out profits at some of the world’s biggest carmakers.

First, Ford said it would take a charge of $350m in the first quarter because of currency losses in Venezuela, adding to its woes after a $126m loss on its South American operations in Q4 2013 caused by downtime in Brazil preparing for new products and “limited availability of US dollars” in Venezuela. Continue reading »

When the Pope met Queen Elizabeth on Thursday, there was one thing – doubtless to Argentine President Cristina Fernández’s great dismay – which was not on the agenda: the Falkland Islands (or, as the Argentine Pope might have called them, Las Malvinas).

As if to make up for that omission, Fernández ensured the disputed territory’s continued presence in Argentines’ minds by printing a map of the archipelago on a new 50 peso note (worth just over $6), with a stirring image of a gaucho who rose up against British rule in 1833 on the other side. Continue reading »

After months of speculation and the world’s longest tightening cycle, it looks like Brazil may finally be done increasing interest rates.

Late on Wednesday, the bank raised Brazil’s Selic rate another 25 basis points to 11 per cent – the highest level in more than two yearsContinue reading »

Brazil’s central bank holds its regular monetary policy meeting Wednesday and the market consensus has rarely been more uniform. Most analysts are forecasting a 25 basis point increase to 11 per cent in the benchmark Selic rate. Continue reading »

Few things appeal to Brazilians more than the combination of a cold beer and a barbecue while watching a soccer game. If the match happens to be part of a World Cup, especially one being hosted in Brazil, then that’s just another excuse to drink more beer.

The recipe for a good festa in Brazil this year seemed almost infallible – that is, until this week, when the government intervened with some terrible news: it plans to increase taxes on beer and some juices, as well as sports and energy drinks. Continue reading »

The Pacific Alliance is all the rage in Latin America. As today’s FT special report shows, the members of this newly-formed free trade pact include some of the region’s best-managed and most reform-minded economies: Chile, Colombia, Mexico and Peru. These countries do not represent some kind of Platonic ideal. They suffer problems aplenty. But their governments do pride themselves on hard-nosed business dealing rather than gassy ideology. That being the case, is there a way for portfolio investors to actually trade the idea? Continue reading »

Montezuma’s revenge is now no longer just for tourists visiting Mexico. The nation’s pig industry has caught it, too.

The Porcine Epidemic Diarrhoea virus, or PEDv, which has ripped through hog herds in the US and hiked Chicago pork prices, has already shown up in most pork producing states in Mexico. Continue reading »

Infonavit, the Mexican agency that is Latin America’s biggest mortgage lender, is catching the Fibra fever.

Fibras are the wildly-successful real estate investment trusts that powered some of Mexico’s record equity market activity last year. Infonavit, which takes a 5 per cent payroll tax from Mexican workers which they can use for mortgages, but is expanding its remit under a new can-do chief, Alejandro Murat, wants to get in on the action. Continue reading »

That was then

Back in 2008, President Luis Inácio Lula da Silva boasted that the tsunami of the global financial crisis would register barely a ripple, uma marolinha, in Brazil. Bar Mexico, this was true for the rest of the region too. Today, though, Latin America is more vulnerable to a devastating “sudden stop” in international capital flows.

As Agustin Carstens, the head of the Mexican central bank, warned last week, such an event could be triggered by higher US interest rates. Or, more worryingly, it could follow a sudden collapse of commodity prices should China’s economy slow abruptly. But how much more vulnerable is Latin America today? About 20 per cent more, according to the Inter-American Development Bank. Continue reading »

Let me explain

By Andrew Rosati and Andres Schipani

The world’s most complicated foreign exchange regime got a bit more complicated this week. Venezuela now has four more-or-less-functioning exchange rates: three official ones plus the black market or innombrable (unmentionable) rate – so called because although its use is widespread among companies and individuals, merely to mention it was, until recently, a crime.

Confused? We’d love to say you won’t be after this episode of beyondbrics. Here’s our explainer. Continue reading »