* Banco Central do Brasil lowered its 2017 GDP growth forecast to 0.8% from 1.3%. The central bank now expects Brazil to end 2016 with a 3.4% GDP contraction, which compares to a previous forecast for a 3.3% decline. The regulator projects an inflation rate of 4.4% for 2017 and 3.6% for 2018, below its target of 4.5%.

* Grupo Financiero Santander Mexico SAB de CV and unit Banco Santander (México) SA Institución de Banca Múltiple said their shareholders approved the payment of a cash dividend from retained earnings in the amount of about 13.62 billion Mexican pesos. The dividend will be paid on Dec. 30.

MEXICO AND CENTRAL AMERICA

* Fitch Ratings assigned several ratings to Grupo Financiero Santander Mexico SAB de CV, including a viability rating of "bbb+," support rating of 2 and long- and short-term local and foreign currency issuer default ratings of BBB+ and F2, respectively. The viability rating assignment reflects the financial performance of the company's main operating unit, Banco Santander (México) SA.

* Annual inflation in Mexico increased to 3.48% in mid-December from 3.31% at the end of the previous month, moving further away from the central bank's 3% target, The Wall Street Journal reported, citing the country's National Statistics Institute.

* The Mexican government said it is increasing the volume of 10-, 20- and 30-year debt it will issue in the first quarter of 2017, while reducing the amounts of its three- and five-year bond sales by 1 billion Mexican pesos, Reuters reported.

* Mexican savings and loans cooperative Caja Popular Mexicana said it issued 540,615 loans in the first 11 months of 2016 for a total amount of about 15.94 billion Mexican pesos, El Economista reported. Most of those loans were issued in the states of Guanajuato, Oaxaca, Michoacán, Jalisco, Morelos and Nayarit.

* The Mexican central bank's recent decision to hike its benchmark interest rate by 50 basis points will allow local pension fund managers to provide better yields to workers, El Economista reported, citing Carlos Ramírez, the head of local pension regulator Consar.

* A study by AXA Seguros S.A. de C.V. found that almost 40% of small and medium-sized enterprises in Mexico do not receive any professional advice in terms of financial planning, El Economista reported. Regulatory data shows that eight out of every 10 SMEs in Mexico are forced to shut down within two years of their launch, and 43% of these closures are due to financial mismanagement.

BRAZIL

* Recent measures announced by Brazil's central bank aimed at reducing credit costs and improving the financial system's efficiency "are unlikely to provide a major boost to credit in the short term," but may result in positive effects in the medium term, Fitch Ratings said. The rating agency believes that the overall measures "could be important reforms to providing the banking system with a more robust operational and legal environment."

* Banco Santander (Brasil) SA said it is expanding its board of directors by two members for a complementary mandate, increasing the total numbers of members to 12. Deborah Patricia Wright and José Luciano Duarte Penido will serve on the company's board until an ordinary shareholders' meeting to be held in 2017.

* Fitch Ratings said it expects Brazil's political environment to be less volatile in 2017, which will contribute positively to growth of the country's asset management industry. "Investors and asset managers have adopted a cautious optimism for 2017 with the change in the Brazilian government and improving economic fundamentals," the rating agency said.

* Brazilian President Michel Temer announced a plan to reduce credit card interest rates and provide subsidies to firms that don't fire employees, Reuters reported. These are the latest in a series of measures announced by the government to revive the country's economy and fight a double-digit unemployment rate.

* Carlos Viana, director of economic policy at Brazil's central bank, said the bank has more flexibility to lower borrowing costs since inflation forecasts continue to be anchored at a lower level, Reuters reported.

* Amid a slowdown in credit, large Brazilian banks have been focusing more on services and insurance in order to sustain profitability, Valor Econômico reported. Raphael Nascimento, a senior analyst at Fitch Ratings, said a focus on services allows banks to grow their operations without compromising capital.

* The website of Brazilian employee indemnity fund FGTS became unstable on Dec. 22 due to a large amount of traffic, Diário Comércio Indústria & Serviços reported. The number of visits to the website jumped after Brazilian President Michel Temer announced that workers would be allowed to withdraw the entire balance of funds from inactive FGTS accounts.

ANDEAN

* S&P Global Ratings revised its stand-alone credit profile on Financiera de Desarrollo Nacional SA to "bb" from "bb-." The bank's stand-alone credit profile is based on its weak business position, undiversified business activities with a limited product range, very strong capital and earnings, moderate risk position and average funding, among other factors.

* The dollarization of loans in Peru fell to 29% in November from 31% a year earlier, El Comercio reported, citing central bank data. The central bank has been working to encourage lending in the local currency to reduce economic risks related to exchange rate volatility.

* German bank Kreditanstalt für Wiederaufbau has agreed to provide the Peruvian government with a loan equivalent to $200 million, which will be used in part to finance a public transportation project, El Comercio reported.

SOUTHERN CONE

* Argentina's government issued a three-month treasury letter worth 48 billion Argentine pesos to state-owned Banco de la Nación Argentina, representing the government's largest debt placement of 2016. The loan, which expires March 21, 2017, will pay an annualized interest rate of 24.13% plus a margin of 116 basis points, resulting in a total annual interest rate of 25.29%.

* Argentina's congress approved an income tax reform proposal that increases the minimum taxable monthly income level for married couples with two children by 23% to 37,000 Argentine pesos, Reuters reported.

* Argentina's central bank is drafting a new rule that will allow local lenders to buy and sell currency notes among themselves without having to go through the central bank, El Cronista reported. The central bank will continue to exchange damaged bills for new ones.

IN OTHER PARTS OF THE WORLD

* Asia-Pacific: Bank of China HK to sell Chiyu Bank stake; Chinese-led group wins PSX stake bid

* Middle East & Africa: Tunisian bank rescue rules; Ugandan insurers' takaful tryst

* Europe: A bank fails; 2 insurers decide to merge; US DOJ now pursues Barclays

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.

Paula Mejia contributed to this article.

The Daily Dose has an editorial deadline of 8 a.m. São Paulo time, and scans news sources published in English, Portuguese and Spanish. Some external links may require a subscription.