International
Brazil hikes interest rate as inflation surges
AFP
Brazil’s central bank on Wednesday hiked its benchmark interest rate by a whopping 150 basis points for the second straight time, seeking to fight surging inflation even as Latin America’s biggest economy is stuck in recession.
The increase, the seventh straight, was in line with analysts’ expectations. It brought the Selic rate to 9.25 percent, the highest since mid-2017.
The decision was made unanimously by the nine members of the bank’s monetary policy committee, which said in a statement it expected “another adjustment of the same magnitude” when it ends its next meeting, on February 2.
“It is appropriate for the monetary tightening cycle to advance significantly into the territory of a contraction,” it said.
“The committee will persevere in its strategy until not only the process of disinflation but the anchoring of (inflation) expectations in line with its targets are consolidated.”
Policymakers are navigating treacherous waters as they try to right Brazil’s listing pandemic recovery.
The South American giant’s economy is in recession, having contracted by 0.4 percent in the second quarter of 2021 and 0.1 percent in the third.
Despite the slump, the central bank has hawkishly slammed on the monetary policy brakes because of surging inflation, fueled by both global price pressures and Brazil’s own domestic problems.
The annual inflation rate came in at 10.67 percent in October, nearly triple the bank’s target of 3.75 percent.
– Spending amendment –
Rapidly rising prices have been driven by a series of factors: internationally, those include global supply chain shortages, increasing oil prices and pandemic uncertainty.
At home, Brazil faces electricity rate hikes caused by droughts that sapped crucial hydroelectric dams, a weak currency and uncertainty around President Jair Bolsonaro’s bid to amend the constitution to free up money in the government’s tight budget for massive social spending.
Critics accuse the far-right president of embracing economic populism with the new spending measures.
But he won a victory Wednesday when Congress adopted a first portion of the spending amendment, enabling the government to postpone court-ordered debt payments.
That will free up 62 billion reais ($11 billion) to spend in 2022, with most expected to go to welfare payments.
The economy has turned into a major headache for Bolsonaro heading into elections next October that polls currently place him on track to lose to leftist ex-president Luiz Inacio Lula da Silva.
Double-digit inflation has left many Brazilian families struggling to make ends meet, weighing down Bolsonaro’s already sagging popularity — and driving his bid for new social spending, political analysts say.
Brazil’s unemployment rate has meanwhile been stubbornly high, at 12.6 percent for the third quarter.
International
Mexican government prioritizes 191 communities after deadly floods
Mexican President Claudia Sheinbaum confirmed on Wednesday that the death toll from recent rains and floods across several central states has risen to 66, while the federal government has activated air bridges and prioritized assistance in 191 isolated communities.
“Unfortunately, 66 people have died, and 75 remain missing,” the president said during her morning press conference. She added that the official death toll will be updated later in a new report.
As of Tuesday, authorities had reported 64 fatalities. Sheinbaum also announced the creation of a public information center to centralize official data on the deceased, missing persons, damaged homes, and cut-off communities.
According to the president, the number of missing persons has decreased thanks to coordination with state authorities.
“Through calls to phone line 079, 103 people who had been reported missing have now been located,” she explained.
Priority Municipalities
The president noted that the federal government has classified 191 communities as ‘priority’, a designation based mainly on the percentage of homes affected.
International
New road and bridge explosions raise alarm amid indigenous protests in Ecuador
Ecuadorian authorities are investigating two explosions that occurred early Wednesday, one on a road in the southern part of the country and another under a bridge in Guayas province. These incidents follow the car bomb explosion in the coastal city of Guayaquil, also in Guayas, which occurred the day before and left one person dead and 30 injured.
Press reports indicate that one person was injured and several vehicles were damaged in the explosion on the Cuenca-Girón-Pasaje road in the south.
“Besides yesterday’s explosion in Guayaquil, we have received reports of explosives placed on bridges along the Guayaquil-Machala and Machala-Cuenca routes to disrupt traffic,” said Roberto Luque, Minister of Infrastructure and Transport (MIT).
On his X social media account, Luque reported that authorities have been deployed to the sites to assess the damage and determine the current condition of the structures.
“What they haven’t achieved with their call for a strike, some are trying to achieve through terrorism,” he stated, referring to the 24 days of protests organized by the Confederation of Indigenous Nationalities (Conaie) against rising diesel prices and other demands.
The protests, called at a national level, have Imbabura province as their epicenter. Roadblocks have also been reported in the northern part of Pichincha province, whose capital is Quito, while activities in the rest of the country continue normally.
International
Armed forces target illegal mines in Northern Ecuador with bombing raids
Ecuador’s Armed Forces carried out an operation on Monday — including airstrikes — against illegal mining in the town of Buenos Aires, in the country’s north, Defense Minister Gian Carlo Loffredo reported.
The mountainous, gold-rich area has been a hotspot for illegal mining since 2017, located in the Andean province of Imbabura.
In 2019, former president Lenín Moreno deployed around 2,400 soldiers to the region in an attempt to curb the illegal activity. “The operation began with mortar fire, followed by gunfire and bombing runs by Supertucano aircraft,” Loffredo said in a video released by the Defense Ministry.
He added that the operation would continue on Tuesday with patrols across the area to locate possible members of “irregular armed groups that may have crossed from the Colombian border.”
The Armed Forces stated on X that the intervention focused on the “complete elimination of multiple illegal mining tunnels” in the areas known as Mina Nueva and Mina Vieja.
The operation coincided with the deployment of a military and police convoy into Imbabura, which has been the epicenter of protests against President Daniel Noboa since September 22, following his decision to scrap the diesel subsidy.
Mexican government prioritizes 191 communities after deadly floods
New road and bridge explosions raise alarm amid indigenous protests in Ecuador
Armed forces target illegal mines in Northern Ecuador with bombing raids
Tec de Monterrey honors one of its students for his contribution to nanotechnology in medicine
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