Expecting the impact of the coronavirus on inflation, the Brazilian Central Bank’s Monetary Policy Committee (Copom) will hold, on Tuesday (17), the second meeting of the year to define the rate Selic, currently at 4.25% per year. The spread of the disease and the instability of the financial market in the last week have led to uncertainty about the fate of basic interest rates in the economy. At the beginning of last week, most of the financial institutions consulted by the Central Bank’s bulletin predicted the maintenance of the Selic, which is at the lowest level in history.
President Jair Bolsonaro announced this afternoon (12) that he will allocate R$ 5 billion ($ 1 billion to fight the coronavirus in Brazil. He said he will sign a Provisional Measure tomorrow, Friday (13) authorizing the action. Bolsonaro cited the Brazilian stock market crash, which plunged 14.78% in the afternoon after two temporary stops, known as “circuit breakers”, and said that the country has a locked budget.
Congress in Brazil maintains sanctions over $6.7 billion of the budget. An agreement was signed that, in addition to the loss of Congress power over this amount, R$15 billion ($3 billion) will be returned to the government. The rest will remain under the command of the congressmen, but under more lenient rules.
Condemned of money laundering and imprisoned at home, former governor Paulo Maluf transferred funds that came out of public works and ended up in shares of his family’s company, Eucatex. An international collection action by the Municipality of São Paulo to recover about $230 million attributed to Paulo Maluf will result in the auction of almost half of the shares of Eucatex, a flooring and laminates company of the former governor’s family.
Bank of America Merrill Lynch cut its 2020 Brazilian economic growth outlook to 1.9% from 2.2%, and JP Morgan to 1.8% from 1.9%. Economy Minister Paulo Guedes and other officials have consistently said the government’s economic reforms and record low interest rates will deliver growth this year comfortably above 2%, with Guedes confident of 2.5%. JP Morgan said investment growth this year will now be lower at 5.0%, while exports will fall 0.5% compared with an earlier forecast of 0.5% expansion.
Real’s relentless decline continued on Thursday, falling below 4.50 per dollar for the first time ever. The Brazilian currency ended trading at new closing low of 4.4750 per dollar, meaning it has depreciated by more than 10% in just two months. Brazil’s central bank dipped into the currency derivatives market on Thursday for the fourth time this month, selling $1 billion of swaps contracts following Wednesday’s $500 million sale to slow or even reverse the real’s fall.
Brazil’s state-controlled oil company Petrobras said it has started the sale process for its 51% stake in the gas unit Gaspetro and for its stakes in the Merluza and Lagosta oil fields in Brazil’s Santos basin, according to a securities filing. Gaspetro is a holding company owning stakes in 19 firms that operate in the Brazilian gas distribution business.
Brazil’s Agriculture Ministry will allow for agrochemicals awaiting regulatory approval to receive licenses automatically, potentially allowing new pesticides to reach market faster, according to new rules published in the government gazette with effect on April 1. If the ministry fails to review applications for new chemicals to be licensed within 60 days, the products will automatically be approved, although they will still need to receive separate approvals by the Health and Environment Ministries before going on the market.
Brazil tops the list of recipients of agrochemical products classified as “highly dangerous,” accounting for about $3.3 billion in 2018, according to Unearthed, a journalism group funded by Greenpeace UK, and the Swiss NGO Public Eye. The pesticides market is dominated by five companies – Bayer, BASF, Syngenta, FMC and Corteva (formerly Dow and DuPont).
A Brazilian government test has confirmed the first case of coronavirus in Latin America, after a Sao Paulo hospital flagged the possible infection of a 61-year-old who had visited Lombardy, in northern Italy. The diagnosis comes during Brazil’s carnival holiday, a peak time for domestic travel when millions of revellers throng major cities for boisterous street celebrations. Sao Paulo stock market, which has been closed since last week, is set to open at 1 p.m. local time. Brazilian shares in exchange-traded funds in New York have dropped nearly 6% this week.