Uber Eats Downsizes in Brazil; Remittances to Mexico Hit a Record $51.6B

A roundup of Thursday’s news from across Latin America

Latin America News Roundup
January 06, 2022 | 10:14 PM

Bloomberg Línea — A roundup of Thursday’s news from our reporters across Latin America.

Argentina

Argentine dollar-denominated bonds recorded their sharpest drop since September, after Economy Minister Martín Guzmán criticized the spending cuts proposed by the International Monetary Fund, and which highlights the difficulties ahead in reaching a new agreement between the lender and the government of President Alberto Fernández as it attempts to renegotiate its $45 billion debt.

After 420 days without change, the country’s Central Bank raised its monetary policy reference rate, known as Leliq, by two percentage points. The central bank, which had held the Leliq rate at 38% since November 13, 2020 despite annual inflation that approached 50%, pushed the rate up to 40% per annum.

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Brazil

Uber (UBER) announced Thursday it will discontinue its Uber Eats restaurant delivery service in Brazil from the second week of March. In a statement, the U.S. company said it had decided to change its delivery strategy in Brazil. After March 7, users will be able to use the Uber Eats app to order items from supermarkets and wholesalers in Brazil. Uber Eats was facing stiff competition in Brazil from rival apps such as iFood and Rappi.

Brazil, the world’s largest soybean producer and exporter, will not produce a record crop this year. Analysts have cut projections for the country’s oilseed production due to persistent drought and heat afflicting the country.

Chile

BHP Group took another step toward downsizing its smallest copper mine in Chile. The Cerro Colorado mine laid off 35 workers, the company confirmed Thursday in a statement. The cuts are part of a de-escalation plan launched in 2020 due to a decline in production and ore quality, and as the mine’s permits for water access and its environmental permit near their expiration date.

The Convention charged with the task of drafting Chile’s new Constitution has elected its new president, María Elisa Quinteros, after the Mapuche academic Elisa Loncón completed her term of office. Quinteros, 40, is a dentist with a doctorate in Public Health, and was elected after nine rounds of voting.

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Colombia

Shares of Colombian financial conglomerate Grupo de Inversiones Suramericana SA (GRUPOSUR) recorded their biggest drop in eight months after key allies rejected billionaire Jaime Gilinski’s public bids to buy their stakes in the company. The company’s common shares fell as much as 5% in Bogotá trading Thursday after food company Grupo Nutresa (NUTRESA) and Grupo Argos (GRUPOARG), which runs cement and energy businesses, rejected Gilinski’s bid for their stakes in Sura.

Ecuador

Ecuador reported annual inflation of 1.94% for 2021, confirming the inflationary trend of the last six months. Of the 12 consumer divisions taken into account to measure inflation in the country, those with the highest annual impact were transportation, food and non-alcoholic beverages, and education.

Vice President Alfredo Borrero has tested positive for Covid-19 and will remain in home isolation and under medical supervision.

Mexico

Remittances to Mexico totaled a record $51.6 billion in 2021, a 27% increase on the 2020 total, according to government estimates. The Bank of Mexico will confirm the annual total on February 1. President Andrés Manuel López Obrador said the money sent from Mexicans working abroad prevented a consumer crisis in the country.

Mexico’s government has requested the establishment of a dispute settlement panel within the framework of the USMCA free trade agreement with the U.S. and Canada to resolve a dispute with the U.S. regarding the interpretation of rules of origin in the automotive sector.

Peru

Peru’s central bank (BCR) agreed in its first meeting of the year to raise the benchmark interest rate by 50 basis points, from 2.5% to 3%. The rate increase responds to the continuation of “the normalization of the monetary policy stance” of the country, the BCR said. The increase brings the rate back up to a level not seen since February 2018.

This is how the region’s markets and currencies closed on Thursday, January 6: