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       T R O U B L E D   C O M P A N Y   R E P O R T E R

                 L A T I N   A M E R I C A

          Thursday, May 4, 2023, Vol. 24, No. 90

                           Headlines



A R G E N T I N A

ARGENTINA: Minister Vows to Use 'All Tools' to Stop Peso's Slump
ARGENTINA: Parallel Currency Slides as Cracks Widen
ARGENTINA: Raises Income-Tax Floor to Half a Million Pesos


B R A Z I L

BRAZIL: Monetary Policy of Central Bank May Cause Fiscal Problems
BRAZIL: Takes Measures to Boost Consumer and Capital Market Credit


X X X X X X X X

LATAM: Regional Economies Will Grow by 1.2%

                           - - - - -


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A R G E N T I N A
=================

ARGENTINA: Minister Vows to Use 'All Tools' to Stop Peso's Slump
----------------------------------------------------------------
Buenos Aires Times reports that Argentina's Economy Minister Sergio
Massa vowed to staunch a collapse in the nation's parallel currency
rates as the peso's worth slumps to record lows.

The nation will use "all the tools of the state to stabilize this
situation," Massa wrote on Twitter, invoking plans to address
currency troubles as officials renegotiate a US$44-billion lending
programme with the International Monetary Fund, according to Buenos
Aires Times.

Argentina's key parallel exchange rate, known as the blue-chip
swap, is in free-fall as locals rush to buy the US dollar amid
rampant inflation, falling reserves and speculation over a
devaluation of the official peso, the report discloses.  The
blue-chip rate has fallen for 10 consecutive days to a record low
of 484 per dollar, the report notes.

The peso is now worth less than half on the parallel market than it
is in the official one, the report discloses.

Another parallel rate, known locally as the "dolar blue," neared a
record 500 pesos per dollar on the streets of Buenos Aires,
according to dolarhoy.com, a widely used financial-news website
that tracks the peso, the report relays.

The nation's inflation passed 100 percent in February, while the
central bank's foreign currency reserves fell to a seven-month low,
the report discloses.  A record drought is also expected to push
the country into recession, spurring plans to renegotiate the IMF
program, the report relays.

In the past, the IMF has put pressure on Argentina to devalue its
official exchange rate to encourage exporters to bring dollars back
into the country and rebuild dwindling reserves, Buenos Aires Times
notes.

President Alberto Fernandez said he won't run for re-election,
upending a race within the ruling Peronist coalition to pick a
candidate ahead of October elections, the report relays.

He blamed the political opposition for extra market volatility, the
report notes.

"This isn't the first time we've seen this," Fernandez said in a
televised statement. "It's a permanent practice of Argentina's
political right-wing," he added, notes the report.

                      About Argentina

Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Alberto Angel Fernandez is
the current president of Argentina after winning the October 2019
general election. He succeeded Mauricio Macri in the position.

Argentina has the third largest economy in Latin America.  The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.

Last March 25, 2022, Argentina finalized agreement with the IMF for
a new USD44 billion Extended Funding Facility (EFF) intended to
fund USD40 billion in looming repayments of the defunct Stand-By
Arrangement (SBA), with an extra USD4 billion in up-front net
financing. This has averted the risk of a default to the IMF
and is facilitating a parallel rescheduling of Paris Club debt.

S&P Global Ratings, on March 29, 2023, lowered its long-term
foreign currency sovereign credit rating on Argentina to 'CCC-'
from 'CCC+'. S&P also affirmed its 'C' short-term foreign currency
sovereign credit rating and its 'CCC-/C' local currency ratings on
Argentina. The outlook on the long-term ratings is negative. S&P
also lowered the transfer and convertibility assessment to 'CCC-'
from 'CCC+'.

The negative outlook on the long-term ratings reflects risks
surrounding pronounced economic imbalances and policy uncertainties
before and after the 2023 national elections. Divisions across the
political spectrum constrain the sovereign's ability to implement
timely changes in economic policy. Global capital markets are
closed to Argentina. In the local market, swaps are being deployed
to manage large maturities before placing debt through traditional
auctions. The central bank continues to play a key role as a
backstop for local debt management in the secondary market. The
ongoing severe drought has exacerbated pressures in the already
disrupted foreign exchange (FX) market.

Fitch Ratings, on the other hand, downgraded Argentina's Long-Term
Foreign Currency
Issuer Default Rating (IDR) to 'C' from 'CCC-', and has affirmed
the Long-Term Local Currency IDR at 'CCC-' on March 24, 2023.
Fitch's downgrade of Argentina's rating to 'C' from 'CCC-' follows
an executive decree that forces domestic public-sector entities
into operations involving their holdings of
sovereign debt securities, which would involve unilateral exchanges
and forced currency conversion that constitute default events under
Fitch's criteria. The 'C' rating reflects Fitch's view that
default
is thus imminent. Fitch said the rating would be downgraded to
'Restricted Default' (RD) upon execution of the exchanges.

Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings.  The outlook remains stable.  The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.

DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.

ARGENTINA: Parallel Currency Slides as Cracks Widen
---------------------------------------------------
Sebastian Boyd at Bloomberg News reports that Argentina boasts more
and more exchange rates (as did Venezuela).  There is even a
special one for buying wine, according to Bloomberg News.  But what
they can't disguise is what is happening to the peso -- Argentina
is holding on tooth and nail and the tension is showing in the
currency, Bloomberg News says.

Recent weeks have shown the weakening of the contado con
liquidacion exchange rate, which measures the ratio between dollar
and peso-denominated shares of Argentine firms to generate a
market-determined exchange rate, Bloomberg News relays.  The
official exchange rate is tightly controlled, Bloomberg News
notes.

Prices more than doubled in February from a year earlier, the first
time in 30 years that inflation has exceeded 100 percent, while an
unprecedented drought stifles growth in a country dependent on
agricultural exports, Bloomberg News discloses.  Argentina's
inflationary mess is a symptom of its idiosyncratic policy mix,
which in turn is a result of its political dysfunction, Bloomberg
News says.

While commentators in the developed world fret about the Federal
Reserve's struggle to control inflation, orthodox economics
essentially solved the problem of how to curb inflation decades ago
(generating it is a bit more difficult, as the European Central
Bank and the Bank of Japan can attest), Bloomberg News relays.
Latin American countries that have adopted central bank
independence, inflation targeting, monetary policy rates and
monetary flexibility have succeeded in overcoming hyperinflation,
Bloomberg News notes.  And although it resurfaced after the
pandemic, few doubt that they will get it back under control,
Bloomberg News discloses.

Argentina, for its part, pursues a policy mix that includes
expanding the money supply, running a high deficit and financing
public spending through the Central Bank, Bloomberg News relays.
It then intervenes to prop up a currency that depreciates because
of the same policy mix. It didn't work before and it doesn't work
now, Bloomberg News notes.  The country conducted a brief
experiment with conventional inflation targeting, but it failed
after the Central Bank caved in December 2017 to government
pressure and raised its inflation target, Bloomberg News says.

The country will hold elections later this year. Whoever wins will
inherit an economic disaster, Bloomberg News relays.  The
opposition should be well positioned, but has yet to define a
candidate: former security minister Patricia Bullrich and Buenos
Aires City Mayor Horacio Rodriguez Larreta are leading the polls,
Bloomberg News says.  Meanwhile, Javier Milei, a Donald
Trump-inspired outsider, seems well positioned to benefit from the
electorate's anger against the political class, Bloomberg News
adds.

                      About Argentina

Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Alberto Angel Fernandez is
the current president of Argentina after winning the October 2019
general election. He succeeded Mauricio Macri in the position.

Argentina has the third largest economy in Latin America.  The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.

Last March 25, 2022, Argentina finalized agreement with the IMF for
a new USD44 billion Extended Funding Facility (EFF) intended to
fund USD40 billion in looming repayments of the defunct Stand-By
Arrangement (SBA), with an extra USD4 billion in up-front net
financing. This has averted the risk of a default to the IMF
and is facilitating a parallel rescheduling of Paris Club debt.

S&P Global Ratings, on March 29, 2023, lowered its long-term
foreign currency sovereign credit rating on Argentina to 'CCC-'
from 'CCC+'. S&P also affirmed its 'C' short-term foreign currency
sovereign credit rating and its 'CCC-/C' local currency ratings on
Argentina. The outlook on the long-term ratings is negative. S&P
also lowered the transfer and convertibility assessment to 'CCC-'
from 'CCC+'.

The negative outlook on the long-term ratings reflects risks
surrounding pronounced economic imbalances and policy uncertainties
before and after the 2023 national elections. Divisions across the
political spectrum constrain the sovereign's ability to implement
timely changes in economic policy. Global capital markets are
closed to Argentina. In the local market, swaps are being deployed
to manage large maturities before placing debt through traditional
auctions. The central bank continues to play a key role as a
backstop for local debt management in the secondary market. The
ongoing severe drought has exacerbated pressures in the already
disrupted foreign exchange (FX) market.

Fitch Ratings, on the other hand, downgraded Argentina's Long-Term
Foreign Currency
Issuer Default Rating (IDR) to 'C' from 'CCC-', and has affirmed
the Long-Term Local Currency IDR at 'CCC-' on March 24, 2023.
Fitch's downgrade of Argentina's rating to 'C' from 'CCC-' follows
an executive decree that forces domestic public-sector entities
into operations involving their holdings of
sovereign debt securities, which would involve unilateral exchanges
and forced currency conversion that constitute default events under
Fitch's criteria. The 'C' rating reflects Fitch's view that
default
is thus imminent. Fitch said the rating would be downgraded to
'Restricted Default' (RD) upon execution of the exchanges.

Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings.  The outlook remains stable.  The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.

DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.

ARGENTINA: Raises Income-Tax Floor to Half a Million Pesos
----------------------------------------------------------
Buenos Aires Times reports that Argentina's government has
announced it will raise the income tax floor for workers to 500,000
pesos, starting Monday (May 1).

According to the report, the Economy Ministry said in a statement
that the floor would be subject to the formula it uses to classify
workers wages and that the move would benefit around a quarter of a
million employees "in a relationship of dependence.|

"With the new income tax floor, no income tax withholdings will
apply when gross remuneration does not exceed 506,230 pesos,
inclusive" per month, said the Economy Ministry's release.

The portfolio headed by Sergio Massa said that when gross monthly
remuneration exceeds 506,230 pesos and is less than or equal to
$583,851, "withholding agents will compute an increased special
deduction," notes Buenos Aires Times.

The floor for 'ganancias' was set at 404,062 pesos back in January,
with those earning under 466,017, subjected to a reduced rate, the
report notes.

"In this line, the proposal applicable from May 2023 is linked to
the variation of the Average Taxable Remuneration of Stable Workers
(RIPTE) of 25.29 percent between October 2022 and February 2023
(last data published)," added the Treasury, the report relays.

The changing of the income tax floor comes with workers suffering
from falling purchasing power amid runaway inflation, according to
Buenos Aires Times. Consumer prices have increased by 104 percent
over the last 12 months, it notes.

Massa is due to meet with business leaders, part of a packed
schedule that includes meetings with Edesur energy firm and later,
China's Gezhouba Group, for talks over the financing of
construction for a dam in Santa Cruz Province, the report
discloses.

As well as meeting with the directors of the Instituto del
Desarrollo Empresarial Argentino (IDEA), the minister is set to
announce details of a new US$380-mullion disbursement from
multilateral lending agencies, the report adds.

                      About Argentina

Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Alberto Angel Fernandez is
the current president of Argentina after winning the October 2019
general election. He succeeded Mauricio Macri in the position.

Argentina has the third largest economy in Latin America.  The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.

Last March 25, 2022, Argentina finalized agreement with the IMF for
a new USD44 billion Extended Funding Facility (EFF) intended to
fund USD40 billion in looming repayments of the defunct Stand-By
Arrangement (SBA), with an extra USD4 billion in up-front net
financing. This has averted the risk of a default to the IMF
and is facilitating a parallel rescheduling of Paris Club debt.

S&P Global Ratings, on March 29, 2023, lowered its long-term
foreign currency sovereign credit rating on Argentina to 'CCC-'
from 'CCC+'. S&P also affirmed its 'C' short-term foreign currency
sovereign credit rating and its 'CCC-/C' local currency ratings on
Argentina. The outlook on the long-term ratings is negative. S&P
also lowered the transfer and convertibility assessment to 'CCC-'
from 'CCC+'.

The negative outlook on the long-term ratings reflects risks
surrounding pronounced economic imbalances and policy uncertainties
before and after the 2023 national elections. Divisions across the
political spectrum constrain the sovereign's ability to implement
timely changes in economic policy. Global capital markets are
closed to Argentina. In the local market, swaps are being deployed
to manage large maturities before placing debt through traditional
auctions. The central bank continues to play a key role as a
backstop for local debt management in the secondary market. The
ongoing severe drought has exacerbated pressures in the already
disrupted foreign exchange (FX) market.

Fitch Ratings, on the other hand, downgraded Argentina's Long-Term
Foreign Currency
Issuer Default Rating (IDR) to 'C' from 'CCC-', and has affirmed
the Long-Term Local Currency IDR at 'CCC-' on March 24, 2023.
Fitch's downgrade of Argentina's rating to 'C' from 'CCC-' follows
an executive decree that forces domestic public-sector entities
into operations involving their holdings of
sovereign debt securities, which would involve unilateral exchanges
and forced currency conversion that constitute default events under
Fitch's criteria. The 'C' rating reflects Fitch's view that
default
is thus imminent. Fitch said the rating would be downgraded to
'Restricted Default' (RD) upon execution of the exchanges.

Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings.  The outlook remains stable.  The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.

DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.



===========
B R A Z I L
===========

BRAZIL: Monetary Policy of Central Bank May Cause Fiscal Problems
-----------------------------------------------------------------
Richard Mann at Rio Times Online reports that the measures adopted
by the Central Bank of Brazil with respect to the basic interest
rate may cause fiscal problems due to the drop in revenue because
it is not possible to dissociate monetary policy from fiscal
policy, said the Minister of Finance, Fernando Haddad.

The Brazilian official participated in a debate before the full
Senate, an exercise in which the president of the Central Bank of
Brazil, Roberto Campos Neto, was also present, according to Rio
Times Online.

                      About Brazil

Brazil is the fifth largest country in the world and third largest
in the Americas.  Luiz Inacio Lula da Silva won the 2022
Brazilian general election. He will be sworn in on January 1, 2023,
as the 39th president of Brazil, succeeding Jair Bolsonaro.

In July 2022, Fitch Ratings affirmed Brazil's Long-Term Foreign
Currency Issuer Default Rating at 'BB-' and revised the Rating
Outlook to Stable from Negative.  In June 2022, S&P Global
Ratings also affirmed its 'BB-/B' long- and short-term foreign and
local currency sovereign credit ratings on Brazil.  Moody's, in
April 2022, affirmed Brazil's long-term Ba2 issuer ratings and
senior unsecured bond ratings, (P)Ba2 senior unsecured shelf
ratings, and maintained the stable outlook.  On the other had,
DBRS, in August 2022, confirmed Brazil's Long-Term Foreign and
Local Currency Issuer Ratings at BB (low).




BRAZIL: Takes Measures to Boost Consumer and Capital Market Credit
------------------------------------------------------------------
Reuters reports that Brazil's government announced a package of 13
measures to ease consumer access to credit and reduce associated
costs in the capital and insurance markets, a move the new leftist
administration hopes will boost investment and revitalize a slowing
economy.

Among the measures is the federal government's proposal to provide
counter-guarantees for public-private partnership projects at the
state and municipal levels, the Finance Ministry said in a
presentation, according to the report.

According to Treasury Secretary Rogerio Ceron, the move is expected
to mitigate financial and political risks seen by private
investors, especially foreign ones, attracting funding for projects
such as the construction of daycare centers and sanitation
facilities, which are dear to the new government of President Luiz
Inacio Lula da Silva, the report notes.

During a news conference, he announced that the Inter-American
Development Bank (IDB) had confirmed the availability of credit
lines for operations within this framework, which are also being
assessed by development bank BNDES, state-owned Banco do Brasil and
other private lenders, the report relays.

Brazil's Secretary of Economic Reforms, Marcos Barbosa, said the
measures aim to strengthen the credit market in the long term,
paving the way for the country's capital market to become as robust
or larger than the 5 trillion reais ($988 billion) banking market,
the report adds.

                        About Brazil

Brazil is the fifth largest country in the world and third largest
in the Americas.  Luiz Inacio Lula da Silva won the 2022
Brazilian general election. He will be sworn in on January 1, 2023,
as the 39th president of Brazil, succeeding Jair Bolsonaro.

In July 2022, Fitch Ratings affirmed Brazil's Long-Term Foreign
Currency Issuer Default Rating at 'BB-' and revised the Rating
Outlook to Stable from Negative.  In June 2022, S&P Global
Ratings also affirmed its 'BB-/B' long- and short-term foreign and
local currency sovereign credit ratings on Brazil.  Moody's, in
April 2022, affirmed Brazil's long-term Ba2 issuer ratings and
senior unsecured bond ratings, (P)Ba2 senior unsecured shelf
ratings, and maintained the stable outlook.  On the other had,
DBRS, in August 2022, confirmed Brazil's Long-Term Foreign and
Local Currency Issuer Ratings at BB (low).




===============
X X X X X X X X
===============

LATAM: Regional Economies Will Grow by 1.2%
--------------------------------------------
RJR News reports that the Economic Commission for Latin America and
the Caribbean is predicting that regional economies will grow by
1.2 per cent this year.

ECLAC said the peak in interest rate globally was attributed to
some financial disturbances seen in early March, which has
increased uncertainty and volatility in financial markets,
according to RJR News.

The United Nations regional commission estimates that the
Caribbean, excluding Guyana, will grow by 3.5 per cent this year,
the report adds.




                           *********


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Latin America is a daily newsletter
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Chapman, Editors.

Copyright 2023.  All rights reserved.  ISSN 1529-2746.

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