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Peru to cut reserve requirements; Cuba's GDP shrinks 0.9%


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Peru to cut reserve requirements; Cuba's GDP shrinks 0.9%

* Banco Central de Reserva del Perú said it intends to cut the marginal reserve requirement for U.S. dollar deposits in January 2017 to 48% from 70% currently, Reuters reported. The central bank also plans to reduce the reserve requirement for local currency deposits to 6% from 6.5%. Together, the two cuts are expected to inject 300 million Peruvian soles into Peru's financial system.

* Cuban President Raul Castro said the country's economy contracted 0.9% in 2016 despite recording growth of 1% in the first half of the year, Reuters reported. "Financial tensions and challenges that might intensify again in certain circumstances will persist, but we hope that gross domestic product will grow moderately, by around 2% [in 2017]," Castro was quoted as saying.


* Although the exposure of Mexican development banks to the energy sector increased markedly in 2016, the banks have so far not been negatively affected by the troubled financial situation of energy firms, El Economista reported, citing Mexico's central bank.


* Banco do Brasil SA CEO Paulo Caffarelli reiterated the bank's goal to reach a capital ratio of 9.5% under Basel III requirements by 2019 without government help, Valor Econômico reported. The state-run lender isn't relying on asset sales to reach its capital goal, but the executive noted that the company could dispose of noncore assets. The bank expects to reduce administrative costs by up to 750 million reais through June 2017, while its retirement incentive plan should provide up to 2.4 billion reais in cost savings by December 2017, the publication reported separately.

* Banco do Brasil SA CEO Paulo Caffarelli said the Brazilian government has not pushed state-run lenders to lower their spread, but borrowing costs will probably decline as the central bank continues to cut its benchmark Selic rate, Reuters reported. "There is a predisposition in the financial sector to follow the drop in the Selic," the executive told reporters.

* Brazil's central bank said it sees gross public sector debt reaching 76.9% of GDP in 2017 from 70.5% in November, Reuters reported. Net debt, meanwhile, is forecast to increase to 52.5% of GDP in 2017 from 43.8% in November.


* Colombia's financial regulator said a total of 429,587 customer complaints were filed against local financial firms in the third quarter, of which 64% were against banks, La República reported. The majority of complaints against banks were related to credit cards.

* Venezuela's central bank received a third shipment of new 500 bolivars currency notes, but the fresh bills have not yet been put into circulation, Gestión reported. The country ordered the new notes, which were originally scheduled to come into circulation on Dec. 15, to deal with rampant inflation. The delay in their issuance has resulted in cash shortages and widespread unrest.


* Banco Central de la República Argentina held its benchmark 35-day interest rate at 24.75% in its last monetary policy decision of 2016. Average monthly inflation was under 1.5% between July and November, the central bank said in a statement, adding that inflation in December is expected to be even lower, which signals that the bank is on track to meet its average monthly inflation target of 1.5% or less in the fourth quarter.

* A federal judge in Argentina indicted former President Cristina Fernandez and other officials from her government on corruption charges, accusing them of crimes "including the deliberate seizure of funds principally meant for public road works," Reuters reported. Fernandez has denied any wrongdoing and blames current President Mauricio Macri of using courts to victimize her.

* A total of $90 billion in assets have so far been declared as part of the Argentine government's tax amnesty program, which runs until March 31, 2017, Reuters reported. Outgoing Finance Minister Alfonso Prat-Gay said the program has been "an extraordinary success." The government hopes that the declared funds will help revive economic growth. Official data showed that economic activity declined 4.7% year over year in October.

* Uruguay's government is looking to create a new accounting unit similar to the country's inflation-indexed unit UI, El Pais reported. The new unit, which has not been named yet and will be tied to an index of nominal wages, will be used mainly in the issuance of public debt.

* International banks believe the departure of Argentine Finance Minister Alfonso Prat-Gay is a nonevent that will not alter growth expectations for the country, El Cronista reported. Traders said Prat-Gay had very limited flexibility in the position as Luis Caputo, the current finance secretary who will head the country's new finance division, took the lead on most economic issues. Prat-Gay has been asked to step down, reportedly due to differences over management style.


* Middle East & Africa: The attraction of Africa; M&A activity in the Middle East

* Europe: Monte dei Paschi needs more; BankNordik expects less; Deutsche Bank CET1 is set

Paula Mejia 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.