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Brazil cuts key rate; XP shares jump 28% in Nasdaq debut


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Brazil cuts key rate; XP shares jump 28% in Nasdaq debut

* Brazil's central bank lowered its benchmark Selic interest rate by 50 basis points to 4.50%, marking its fourth consecutive rate cut of 2019. The bank's monetary policy committee raised its inflation projection for 2019 to 4.0% from 3.4% previously, and lowered the forecast for 2020 to 3.5% from 3.6%. Current economic conditions still warrant "stimulative" monetary policy, the central bank said.

* Brazilian brokerage XP Inc.'s shares closed at $34.46 apiece in New York trading on Dec. 11, up 28% from the $27 pricing level announced in the previous day's initial public offering on Nasdaq, Bloomberg News reported. XP CEO Guilherme Benchimol said a listing on the Brazilian stock exchange is a possibility, but would require regulatory changes in the Latin American country, Estadão reported.


* Moody's upgraded the government of Jamaica's long-term issuer and senior unsecured ratings to B2 from B3 and senior unsecured shelf rating to (P)B2 from (P)B3. The outlook was revised to stable from positive. The upgrade reflects Jamaica's commitment to fiscal consolidation and structural reforms that portend a continued decline in government debt.

* S&P Global Ratings raised its long- and short-term foreign currency sovereign credit ratings on Barbados to B-/B from SD/SD, or selective default. The upgrade follows Barbados' foreign currency debt exchange, which has addressed the government's commercial U.S. dollar debt outstanding.


* Banco do Brasil SA said it approved an organizational restructuring that reduced its number of executive officers to 26. As part of the move, which is in line with the bank's corporate strategy for 2020 to 2024, Walter Malieni Júnior and Mauro Ribeiro Neto were nominated to the company's board of officers.

* Banco Votorantim SA said it has changed its name to Banco BV as part of a broader rebranding effort. The bank also announced the creation of a customer and data intelligence board and named Adriana Gomes to lead it.

* Banco Nacional de Desenvolvimento Econômico e Social said it made another 30 billion reais debt repayment to Brazil's National Treasury, noting that with the latest payment, the state-owned development bank has now returned 123 billion reais to the government.

* S&P Global Ratings revised its outlook on Brazil's long-term ratings to positive from stable amid prospects for a stronger fiscal profile over the medium term. The rating agency pointed to the country's pension overhaul, expectations of progress in other growth measures and a domestic demand-driven economic expansion as factors that could lift Brazil's fiscal position in the next three years.

* Brazil's lower house approved a proposal to transfer control of the Coaf financial activities control board to the central bank from the economy ministry, Folha de S.Paulo reported. The proposal will now move to the Senate.

* Mastercard expects the volume of credit and debit card purchases in Brazil to reach about 2.3 trillion reais in 2020, Reuters reported, citing João Pedro Paro Neto, the company's president in the country. Industry association Abecs expects volume to reach 1.85 trillion reais this year.

* Brazilian venture capital company Canary completed a $75 million fundraising effort, expanding its focus on local startups that show high growth potential, Reuters reported.


* Bancolombia SA priced a US$550.0 million public offering of subordinated notes due Dec. 18, 2029, saying that the notes will carry a coupon of 4.625%. The 10-year notes have an optional redemption right in the fifth year.

* Weaker economic growth and rising political risks will weigh on Bolivian banks' asset quality and funding and liquidity profiles, according to Moody's. The rating agency said banks' operating conditions will erode due to the likelihood of reduced business prospects and increased loan delinquencies.


* Argentine Economy Minister Martin Guzman said the country must expand its way out of a "virtual default" with a production-focused strategy as opposed to further reductions in public spending, Reuters reported. "The year 2020 is not a year in which fiscal adjustment can be made," Guzman said. "A larger fiscal contraction would deepen the recession and aggravate the problem."


* Moody's said it maintains a stable outlook for the Latin American banking system in 2020, driven by high profitability, contained asset risk and quality funding. Margins and overall profitability for banks in the region "will remain stronger than global peers despite pressure from low interest rates," Moody's analyst Marcelo De Gruttola said.


* Asia-Pacific: Malaysia's BIMB eyes restructuring; APRA keeps bank buffers at 0%

* Middle East & Africa: Israel to hold 3rd election; IMF, Ethiopia reach preliminary agreement on loan

* Europe: UK challenger banks seek rule easing; Credit Suisse faces new spying claim

Pablo Jimenez Arandia contributed to this article.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.

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