* Mexico's central bank lowered its benchmark interest rate for the second consecutive meeting this year, cutting the rate by 25 basis points to 7.75%. Two policymakers voted for a rate cut of 50 basis points, the central bank said, adding that it expects to see a slight recovery in economic activity through the rest of 2019. Mexico's GDP was stagnant in the second quarter after a 0.2% contraction in the first quarter.
* The central bank of Guyana has blocked the sale of Bank of Nova Scotia's banking operations in the country to Republic Financial Holdings Ltd., Bloomberg News reported. According to the Trinidad and Tobago Guardian, the deal was blocked due to concerns over banking sector concentration and other risks. Scotiabank announced the sale of its banking operations in nine Caribbean countries to Republic Financial in November 2018. The deal still lacks approval from authorities in Antigua and Barbuda.
MEXICO AND CENTRAL AMERICA
* International Monetary Fund spokesman Gerry Rice said the Mexican government is interested in maintaining access to a flexible credit line from the IMF, Reuters reported. Mexico's $86 billion flexible credit line with the fund, which was approved in 2017 and trimmed to $74 billion in 2018, is set to expire at the end of November.
* Mexico's central bank issued an alert about a heightened risk of cyberattacks on Sept. 26 after several financial institutions reported "incidents" in connecting to the SPEI interbank payment system, El Financiero reported.
* Mexico's CNBV banking regulator said 85 financial technology companies met the September deadline to apply for an operating license, with 60 of them seeking to operate as electronic payment companies and the remaining 25 as crowdfunding platforms, El Financiero reported.
* Crédito Real SAB de CV Sociedad Financiera de Objeto Múltiple ER said it received $196.3 million of valid early tenders in its offer to repurchase 7.250% senior notes due 2023. The early tenders represent about 65.4% of the maximum tender amount of $300.0 million.
BRAZIL
* Brazil's central bank increased its GDP growth forecast for 2019 to 0.9% from 0.8%, pointing toward better-than-expected economic performance in the second quarter. The bank said it expects growth to accelerate to 1.8% in 2020, but noted that the forecast for next year still entails "a high degree of uncertainty."
* Brazilian central bank chief Roberto Campos Neto said the bank has a close eye on the real currency's exchange rate to see if recent weakness is having an effect on inflation forecasts or risk premia in financial markets, Reuters reported. "Our aim is to intervene as cleanly as possible, meeting demand as directly as possible, at the lowest cost for the government," he said.
* Brazil's central bank cut its forecast for domestic credit growth in 2019 to 5.7% from 6.5% previously, Estadão reported. The new forecast is still higher than the 5.0% growth rate seen in 2018.
* Caixa Econômica Federal is looking to block the judicial recovery proceedings of scandal-hit construction and engineering conglomerate Odebrecht, Folha de S.Paulo reported. The state-run bank said irregularities in the process prevent creditors from properly evaluating Odebrecht's recovery plan.
ANDEAN
* Créditos y Ahorro Credifinanciera SA Compañía de Financiamiento issued 100.00 billion Colombian pesos of ordinary bonds. The five-year notes were offered to investors in Colombia's secondary market.
* Banco Davivienda SA issued 700 billion Colombian pesos of ordinary bonds in three tranches, with demand for the notes reaching about 1.35 trillion pesos, La República reported. The bank will use the proceeds for working capital purposes.
SOUTHERN CONE
* Argentina's latest economic crisis has spurred a string of ratings downgrades and caused prolonged market turmoil, but unlike prior crises, the banking sector should be able to hold up, Gabriel Torres, senior sovereign credit officer at Moody's, said at a press conference following the rating agency's annual conference in Buenos Aires. Although Argentina's latest plans to re-profile debt is tantamount to a default, the expected haircut bondholders could take on their investment is far less severe compared to Argentina's sovereign default in 2001, Torres said.
* Moody's changed its outlook on Argentina's banking system to negative from stable, warning that "worsening operating conditions ... will continue to affect banks' asset risk profiles, capital and inflation-adjusted earnings." The rating agency said it expects Argentina's GDP to contract 3.8% in 2019 and 2.5% in 2020, adding that currency volatility will likely continue undermining investor and consumer sentiment.
* Due to Argentina's imposition of capital controls, index provider FTSE Russell removed the country from a watch list for a potential reclassification to secondary emerging market status. Argentina will remain a frontier market for now.
* International Monetary Fund spokesman Gerry Rice said the international lender remains in discussions with Argentina, but added that there is no deadline for the fund to make its next $5.4 billion disbursement to the crisis-hit country, Reuters reported. "It is incorrect to say that the IMF has in some way put the relationship with Argentina on hold," he said.
* Paraguayan President Mario Abdo Benítez has appointed Banco Nacional de Fomento Chairman Daniel Correa as an economic advisor, 5días reported. Carlos Florentín, the former finance manager at Banco para la Comercialización y la Producción SA, replaces Correa as Banco Nacional de Fomento's chairman.
IN OTHER PARTS OF THE WORLD
* Asia-Pacific: China drafts rules on loan provisions; India to consider bailout framework
* Middle East & Africa: Egypt cuts rates; QNB gets nod for Hong Kong branch; Capitec's expansion plans
* Europe: New CFO at Aviva, Commerzbank; UniCredit sells €730M loans; BNP faces lawsuit
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.
