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Brazil cuts 2019 growth forecast; Costa Rica lowers benchmark rate

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Brazil cuts 2019 growth forecast; Costa Rica lowers benchmark rate

* Brazil's government lowered its 2019 GDP growth forecast to 1.6% from 2.2% and raised its inflation forecast for the year to 4.1% from 3.8%. The country's economy ministry said economic activity indicators "in the first quarter have not recovered as we had hoped, especially manufacturing and industry," Reuters reported. Official figures due next week are expected to show economic contraction in the first quarter.

* Costa Rica's central bank lowered its monetary policy rate by 25 basis points to 4.75%, saying that low economic growth and high unemployment have generated deflationary risks. The bank also cut its gross interest rate for one-day deposits by 19 basis points to 2.85%.

MEXICO AND CENTRAL AMERICA

* Guatemalan lawmakers are looking to relaunch a stalled credit card regulation law, which was suspended by a constitutional court in December 2018, El Periodico reported. The most sensitive article of the law seeks to cap interest rates on credit cards, which critics say would distort the credit market.

* Bitso SAPI de CV, a Mexican trading platform for virtual assets, is looking to expand the use of bitcoin for remittance payments to the country, El Economista reported, citing co-founder Pablo González. Bitso simplifies the process of sending remittances and lowers the cost by eliminating intermediaries, González said.

* Liberty Mutual Reinsurance, the reinsurance arm of Liberty Specialty Markets Ltd., launched a reinsurance operation under Lloyd's registration in Mexico to serve clients in Mexico and Central America. The Mexico reinsurance team will provide property, casualty and specialty treaty reinsurance, which will be underwritten by Liberty Mutual Re in Europe.

BRAZIL

* Lawmakers in Brazil's lower house approved President Jair Bolsonaro's proposed reorganization of the executive branch, cutting the number of ministries to 20 from 29, Reuters reported. Legislators also voted to keep the Council for Financial Activities Control under the economy ministry, rejecting a proposal to place it under the control of Justice Minister Sergio Moro.

* Banco Bradesco SA CEO Octavio de Lazari Jr. said lending activity slowed in the second quarter compared to the first three months of 2019, reflecting a sluggish economy, Valor Econômico reported. Even if Brazil's proposed pension reform is approved by September, economic activity will only start to recover in 2020, he said.

* Banco Bradesco SA CEO Octavio de Lazari Jr. said a diluted pension reform that generates 600 billion reais of savings in 10 years, below the government's target of 1 trillion reais, will be insufficient, Valor Econômico reported. If the pension reform bill is watered down, the government will need to revisit the overhaul five years from now, the executive said.

* Caixa Econômica Federal will launch a selection process to find partners for its prepaid cards business before the planned IPO of its cards unit, Valor Econômico reported.

* Brazilian financial technology firms are optimistic about financing conditions for their business and a tailored regulatory framework being developed by local authorities, Valor Econômico reported, citing comments by industry executives.

ANDEAN

* The International Monetary Fund reaffirmed Colombia's access to a flexible credit line of about $11 billion, saying that the country's economic recovery is gaining momentum due to strong policy frameworks. The current two-year credit arrangement for Colombia was approved by the IMF's executive board in May 2018.

SOUTHERN CONE

* Policymakers at Paraguay's central bank unanimously voted to hold its benchmark interest rate at 4.75%. Although inflation forecasts remain within the central bank's target range, global trade tensions have complicated the regional economic outlook, the bank said.

* Uruguay's central bank announced plans to repurchase up to 35 billion Uruguayan pesos of LRM monetary regulation bills to ease exchange rate pressures, El Observador reported. The notes will mature no later than Dec. 31.

* Economic activity in Argentina declined 6.8% year over year in March after falling 4.8% annually in the previous month, Reuters reported, citing government data.

IN OTHER PARTS OF THE WORLD

* Middle East & Africa: Zambia central bank hikes key rate; Kenyan banks post Q1 results

Helen Popper contributed to this article.

The Daily Dose has an editorial deadline of 8:00 a.m. São Paulo time, and scans news sources published in English, Portuguese and Spanish. Some external links may require a subscription. Links are current as of publication time, and we are not responsible if those links are unavailable later.