Latest news with #MarcelaAyres
Yahoo
07-05-2025
- Business
- Yahoo
Brazil central bank hikes rates to near 20-year high, leaves next steps open
By Marcela Ayres BRASILIA (Reuters) -Brazil's central bank raised interest rates by 50 basis points on Wednesday in a sixth straight hike that pushed borrowing costs to their highest in nearly 20 years, and left future steps open amid global uncertainties and sticky domestic inflation. The bank's monetary policy committee, known as Copom, raised the Selic to 14.75% in a unanimous decision, matching forecasts from 32 of 35 economists in a Reuters poll. "For the next meeting, the scenario of heightened uncertainty, combined with the advanced stage of the current monetary policy cycle and its cumulative impacts yet to be observed, requires additional caution in the monetary policy action and flexibility to incorporate data that impact the inflation outlook," policymakers said in the statement from the decision. In March, the central bank had already flagged the need for further tightening, though at a slower pace than the previous three 100 basis-point hikes. With Wednesday's move - announced just hours after the U.S. Federal Reserve held rates steady but cited the risk of rising inflation and unemployment - the Selic benchmark rate has now reached its highest level since August 2006. The sky-high rates come against a backdrop of a 5.49% annual inflation rate, well above the official 3% goal, with markets skeptical that inflation will return to target even by as far out as 2028. The aggressive tightening has added 425 basis points to the benchmark rate since September, but policymakers stressed on Wednesday they observe "an incipient moderation in growth," with indicators of domestic economic activity and the labor market still exhibiting strength. Global uncertainties, triggered by sweeping U.S. trade tariffs that have clouded the outlook for the world's largest economy, have led Copom members to emphasize the need for greater caution and flexibility in remarks ahead of the decision. The current environment, they argued, not only limits their ability to provide any guidance but also requires policymakers to consider a broader and diverse set of data to assess whether monetary policy is achieving its intended effects. Their concern about the trajectory of Latin America's largest economy came despite some favorable inflationary developments since the Brazilian central bank's latest policy meeting, including a stronger currency and lower commodity prices. On the other hand, the government of President Luiz Inacio Lula da Silva has unveiled new stimulus measures, such as changes to rules governing payroll-deductible loans, as it struggles to reverse a plunge in the leftist leader's approval ratings.
Yahoo
30-04-2025
- Business
- Yahoo
Brazil considers capping meal voucher fees, Pix system deposits doubtful, say sources
By Marcela Ayres BRASILIA (Reuters) -Brazil's government is considering capping card processor fees and shortening settlement periods to cut intermediation costs in the country's multi-billion-dollar meal voucher market, three sources with knowledge of the government's plans said. The sources, who requested anonymity to discuss private talks, said the idea of transferring funds directly to workers through Brazil's widely popular Pix instant payment system had been discussed but is unlikely to move forward because of strong opposition from restaurant associations and meal voucher companies, which act as intermediaries. The move comes as the government tries to curb food inflation that has weighed on President Luiz Inacio Lula da Silva's approval ratings, though it continues to delay regulations needed to open up the concentrated meal voucher market under rules passed by Congress in 2022. The Labor Ministry did not respond to a request for comment, and the Finance Ministry declined to comment. The Pix alternative had been reported by local outlets last week, sending shares of meal voucher providers Edenred, which owns Ticket, and Pluxee, which owns Sodexo, sharply lower. Alongside privately held Alelo and VR, these companies control roughly 85% of Brazil's meal voucher market. Direct Pix deposits would effectively eliminate the need for intermediaries in a market that moves around 170 billion reais ($30 billion) annually under Brazil's Worker Food Program (PAT), created in 1976 to offer tax incentives to companies covering their employees' meal costs. Speaking to state media on Wednesday, Labor Minister Luiz Marinho also appeared to dismiss the Pix-based alternative. "The program needs to be preserved. Many ideas emerged, and some would have essentially destroyed it. So those were completely ruled out," Marinho said. Without providing details, the minister said there would be changes to fees, which he described as "very high." The sources said the government is considering a cap on the MDR (merchant discount rate) — the fee charged to merchants per transaction. Government estimates seen by Reuters show restaurants pay about 8% more on sales with meal vouchers than with credit cards. Marinho also flagged potential changes to settlement periods, acknowledging controversy over how long it takes for funds to reach restaurants after being paid to the voucher companies. In the public sector, he said, contracts often stipulate 30-day payment terms. "Contracts need to be adjusted to drastically shorten that period," he said. Marinho said the government is weighing the issue carefully and could announce a decision in May, although no formal decree is currently in the works. The Brazilian Chamber of Worker Benefits (CBBT), which represents newer companies, said there is no evidence that changing fees or settlement terms would lower food costs for workers. It instead called for the long-delayed implementation of a 2022 law that opened the rule for a single "interoperable" network for all accredited players. The measure, which is also supported by supermarkets, would enable open access to major voucher networks and end exclusivity in participant access. But Lula's administration has delayed regulations needed to implement the changes, including portability rules that would allow users to transfer meal credits between providers. ($1 = 5.6635 reais) Sign in to access your portfolio
Yahoo
28-04-2025
- Business
- Yahoo
Brazil to offer tax breaks to lure data center investments, sources say
By Marcela Ayres BRASILIA (Reuters) -Brazilian Finance Minister Fernando Haddad will begin a trip to Silicon Valley this week with a plan to lure data centers to his country by exempting the related technology investments from federal taxes, four sources familiar with the matter told Reuters. Haddad's trip to California on Friday includes a May 6 breakfast with tech executives in Palo Alto, where he will pitch Brazil as a sustainable infrastructure hub, leveraging the country's abundant supply of renewable energy. Speaking at an event hosted by conglomerate J. Safra in Sao Paulo, Haddad confirmed the trip and said Brazil could leverage its clean energy potential to attract investment and build data centers, adding that the new policy would help boost capital inflows. The Finance Ministry estimates the new policy could unlock some 2 trillion reais ($352 billion) in investments over the next decade, including the spillover into construction, telecoms and AI-related services, according to two of the sources, who requested anonymity in order to discuss the private plans. The Finance Ministry did not respond to a request for comment. The same sources said the planned data center investment by ByteDance, the Chinese parent company of TikTok, would also be a beneficiary of the plan, an executive order that will require congressional approval to be made permanent. The policy will exempt key federal taxes - PIS, Cofins, IPI, and import duties - on IT-related capital expenditures for data centers, the two sources said. One of them stressed that the main cost for such ventures is not electricity - which in Brazil is largely sourced from renewable energy, with more than 80% coming from hydro, solar, and wind power - but rather hardware depreciation, a significant burden due to the country's complex and costly tax system. Non-IT investments, such as building construction, will not be exempt under the measure. As a result, the policy is expected to yield fiscal gains that will support, rather than strain, Brazil's federal budget from next year. Amid rising global trade tensions, including U.S. tariffs and tensions with China, the plan aims to capitalize on Brazil's diplomatic openness as a selling point for foreign investments. "We don't pick fights. We're friends with everyone. That means Brazil can serve the world without major hurdles," one of the sources said. A landmark tax reform approved under President Luiz Inacio Lula da Silva last year provides for exemptions on capital spending, but they are set to take effect only in 2033. The new measure, led by the ministries of development and finance, aims to fast-track these benefits to encourage green data center investments. To qualify, projects must meet sustainability criteria, including using 100% renewable energy. Additional conditions will require projects to reserve a significant portion of capacity for domestic use, even if intended for export, and contribute to a fund supporting Brazil's AI ecosystem. ($1 = 5.6892 reais) Sign in to access your portfolio
Time of India
28-04-2025
- Business
- Time of India
Brazil to offer tax breaks to lure data center investments
By Marcela Ayres BRASILIA: Brazilian Finance Minister Fernando Haddad will begin a trip to Silicon Valley this week with a plan to lure data centers to his country by exempting the related technology investments from federal taxes, four sources familiar with the matter told Reuters. Haddad's trip to California on Friday includes a May 6 breakfast with tech executives in Palo Alto, where he will pitch Brazil as a sustainable infrastructure hub, leveraging the country's abundant supply of renewable energy. The Finance Ministry estimates the new policy could unlock some 2 trillion reais ($352 billion) in investments over the next decade, including the spillover into construction, telecoms and AI-related services, according to two of the sources, who requested anonymity in order to discuss the private plans. The Finance Ministry did not respond to a request for comment. The same sources said the planned data center investment by ByteDance, the Chinese parent company of TikTok, would also be a beneficiary of the plan, an executive order that will require congressional approval to be made permanent. The policy will exempt key federal taxes - PIS, Cofins, IPI, and import duties - on IT-related capital expenditures for data centers, the two sources said. One of them stressed that the main cost for such ventures is not electricity - which in Brazil is largely sourced from renewable energy, with more than 80% coming from hydro, solar, and wind power - but rather hardware depreciation, a significant burden due to the country's complex and costly tax system. Non-IT investments, such as building construction, will not be exempt under the measure. As a result, the policy is expected to yield fiscal gains that will support, rather than strain, Brazil's federal budget from next year. Amid rising global trade tensions, including U.S. tariffs and tensions with China, the plan aims to capitalize on Brazil's diplomatic openness as a selling point for foreign investments. "We don't pick fights. We're friends with everyone. That means Brazil can serve the world without major hurdles," one of the sources said. A landmark tax reform approved under President Luiz Inacio Lula da Silva last year provides for exemptions on capital spending, but they are set to take effect only in 2033. The new measure, led by the ministries of development and finance, aims to fast-track these benefits to encourage green data center investments. To qualify, projects must meet sustainability criteria, including using 100% renewable energy. Additional conditions will require projects to reserve a significant portion of capacity for domestic use, even if intended for export, and contribute to a fund supporting Brazil's AI ecosystem.
Yahoo
28-04-2025
- Business
- Yahoo
Brazil to offer tax breaks to lure data center investments, sources say
By Marcela Ayres BRASILIA (Reuters) -Brazilian Finance Minister Fernando Haddad will begin a trip to Silicon Valley this week with a plan to lure data centers to his country by exempting the related technology investments from federal taxes, four sources familiar with the matter told Reuters. Haddad's trip to California on Friday includes a May 6 breakfast with tech executives in Palo Alto, where he will pitch Brazil as a sustainable infrastructure hub, leveraging the country's abundant supply of renewable energy. The Finance Ministry estimates the new policy could unlock some 2 trillion reais ($352 billion) in investments over the next decade, including the spillover into construction, telecoms and AI-related services, according to two of the sources, who requested anonymity in order to discuss the private plans. The Finance Ministry did not respond to a request for comment. The same sources said the planned data center investment by ByteDance, the Chinese parent company of TikTok, would also be a beneficiary of the plan, an executive order that will require congressional approval to be made permanent. The policy will exempt key federal taxes - PIS, Cofins, IPI, and import duties - on IT-related capital expenditures for data centers, the two sources said. One of them stressed that the main cost for such ventures is not electricity - which in Brazil is largely sourced from renewable energy, with more than 80% coming from hydro, solar, and wind power - but rather hardware depreciation, a significant burden due to the country's complex and costly tax system. Non-IT investments, such as building construction, will not be exempt under the measure. As a result, the policy is expected to yield fiscal gains that will support, rather than strain, Brazil's federal budget from next year. Amid rising global trade tensions, including U.S. tariffs and tensions with China, the plan aims to capitalize on Brazil's diplomatic openness as a selling point for foreign investments. "We don't pick fights. We're friends with everyone. That means Brazil can serve the world without major hurdles," one of the sources said. A landmark tax reform approved under President Luiz Inacio Lula da Silva last year provides for exemptions on capital spending, but they are set to take effect only in 2033. The new measure, led by the ministries of development and finance, aims to fast-track these benefits to encourage green data center investments. To qualify, projects must meet sustainability criteria, including using 100% renewable energy. Additional conditions will require projects to reserve a significant portion of capacity for domestic use, even if intended for export, and contribute to a fund supporting Brazil's AI ecosystem. ($1 = 5.6892 reais) Sign in to access your portfolio
