* Brazil's central bank cut its benchmark Selic interest rate by 50 basis points to 5.50%, citing the economy's gradual recovery and subdued inflation. The central bank's inflation projections are at around 3.3% for 2019 and 3.6% for 2020, assuming that the Selic rate will drop to 5.00% by the end of 2019 and remain at that level throughout 2020.
* Argentina's central bank said it is raising the floor for its benchmark interest rate to 78% from 58% for the rest of September and setting a floor of 68% for October. The bank believes "these measures will allow for real positive interest rates to be sustained and for the deflation process to resume from October." The central bank also raised the monetary base by 2.5% for September and October "to avoid excessive monetary contraction."
MEXICO AND CENTRAL AMERICA
* Storm Lorena strengthened into a category one hurricane on Sept. 18 as it made its way toward the Mexican state of Baja California, Reuters reported. "Additional strengthening is forecast during the next couple of days," the U.S. National Hurricane Center said.
* Mexican insurers have paid 71% of the insured claims for damages caused by two devastating earthquakes in September 2017, which cost the industry an estimated $1.65 billion, El Financiero reported, citing the AMIS industry association.
BRAZIL
* Banco Votorantim SA's newly appointed president, Gabriel Ferreira, said the Brazilian bank is preparing for a stock exchange listing, Diário Comércio Indústria & Serviços reported. The terms of the IPO have not been decided yet, but Grupo Votorantim and Banco do Brasil SA plan to remain shareholders of the bank, Ferreira said.
* The government of Brazil's Rio Grande do Sul state cancelled a planned offer of common shares in state-run Banco do Estado do Rio Grande do Sul SA after the follow-on offer failed to attract investors willing to pay the asking price of 19 reais per share, Valor Econômico reported, citing two unnamed sources. Investors were reportedly displeased with the reduction of the offer to 71,350,686 shares from 96,323,426 shares.
* Brazil's government will free up as much as 22 billion reais to ease a budget strain triggered by spending freezes earlier in 2019, Reuters reported, citing Economy Minister Paulo Guedes. The funds will be sourced from higher-than-expected tax revenue in July and August and dividends from state-run banks, among other areas.
* Financial technology companies operating in Brazil are targeting the unsecured loans market, a segment shunned by traditional banks during the economic crisis, Valor Econômico reported, citing a study conducted by PwC in partnership with the Brazilian Digital Credit Association. Unsecured loans are offered by 42% of credit fintechs.
* Brazilian Economy Minister Paulo Guedes said the government would look for alternatives following the president's decision to scrap a proposed levy on financial transactions from a wider tax reform draft, Folha de S. Paulo reported. A day earlier, Guedes defended the possibility of reviving a financial transactions tax in Brazil, albeit in a different format to the former CPMF.
ANDEAN
* Reinsurance broker THB Peru is seeking to diversify to new sectors such as cybersecurity, General Manager Roberto Olaechea told SEMANAeconómica. He added mergers and acquisitions insurance was another potential growth area in Peru.
* Colombia's Banco de Occidente SA sold 400 billion pesos in three series of debt in a Dutch auction, with investor interest in the issue exceeding 1.51 trillion Colombian pesos, La República reported. The 36-month notes paid the IPC rate plus 1.75%, while the 60-month bond paid 5.83%. A 120-month issue paid the IPC rate plus 2.63%.
SOUTHERN CONE
* The International Monetary Fund will hold talks with Argentine authorities in the coming weeks to discuss the central bank's Sept. 18 announcement of monetary policy changes as well as other issues, Clarín reported. Sources at the IMF told the publication that the Fund remained "committed to Argentina."
* Argentina's economy probably grew 0.1% in the second quarter from a year earlier, according to the average estimate of 10 analysts polled by Reuters. Statistics agency INDEC is expected to release official economic data for the second quarter today.
* For the first time, more dollars are being sent to Argentina as remittances than are being sent to family members outside the country, Clarín reported, citing Western Union's Argentina CEO Maximiliano Babino. The trend reportedly became evident about a year ago when the peso fell sharply against the dollar.
* Argentina's Tarjeta Naranja SA has launched a new mobile platform called Naranja X, allowing mobile phone users to carry out basic financial services, including foreign currency transactions, Clarín reported. The platform was launched with an initial investment of $50 million.
IN OTHER PARTS OF THE WORLD
* Asia-Pacific: US Fed cuts rates; DBS Bank eyes Thailand in AUM expansion plans
* Middle East & Africa: Saudi Arabia, UAE cut rates; Banque Centrale Populaire H1 profit up
* Europe: Deutsche, Barclays named in German tax fraud trial; Nordea CFO to depart
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.
