Latin America News
LAST UPDATE: July 25, 2025
Argentina Reaches IMF Staff Agreement to Unlock $2 Billion
Argentina has reached a staff-level agreement with the IMF on the first review of its $20 billion Extended Fund Facility program, setting the stage for release of approximately $2 billion in disbursements.
Insight
The agreement hinges on macroeconomic metrics around inflation control and rebuilding foreign reserves. It marks a critical milestone in Argentina’s economic adjustment and enhances credibility ahead of upcoming political tests.
Mexico president hails sharp drop in fentanyl flows to US
President Claudia Sheinbaum praised anti‑drug operations that have led to a reported 50 % decline in fentanyl seizures at the U.S. border, attributing progress to her administration’s enforcement efforts.
Insight
The drop comes amid U.S. pressure—including tariff threats—to curb drug flows. Mexico seeks to demonstrate responsiveness and assert its role in addressing the fentanyl crisis, using the reduction as evidence of effective bilateral cooperation.
Banxico Should Hold Key Rate Due to High Core Prices, Heath Says
Deputy Governor Jonathan Heath argued that Banco de México should maintain its benchmark interest rate, noting that Mexico’s core inflation remained above 4.20% in early July, and continues to anchor medium-term inflation trends.
Insight
Despite recent softening in headline inflation, persistently high core prices justify policy caution. Heath suggests delaying rate cuts until broader disinflation is evident, underlining the risk of premature easing.
Brazil to present Lula with credit-based response to US tariff hike, finance minister says
Finance Minister Fernando Haddad said Brazil will present President Lula with a contingency plan including credit lines to support the estimated 10,000 companies likely to be affected by incoming U.S. tariffs.
Insight
The plan reflects an economic strategy that aims to shield vulnerable firms while maintaining readiness for dialogue. Haddad framed the tariffs as politically motivated and signaled domestic resilience through countermeasures.
Brazil VP hails ‘good’ and ‘fruitful’ conversation with Lutnick on tariffs
Vice President Geraldo Alckmin described a recent hour-long discussion with U.S. Commerce Secretary Howard Lutnick as “good” and “fruitful.” He reaffirmed Brazil’s willingness to negotiate ahead of proposed 50% U.S. tariffs effective August 1.
Insight
The diplomatic tone signals openness to resolution, even as Brazil faces mounting pressure from sudden trade disruptions linked to political tensions. Alckmin stressed that Brazil did not provoke the issue and wants a diplomatic outcome.
Ecuador Fires 5,000 Public Workers Amid Pressure to Cut Spending
President Daniel Noboa’s administration is laying off 5,000 civil servants and cutting roughly 40% of public ministries and secretariats. The move aims at reducing fiscal deficits and meeting IMF targets.
Insight
The deep cuts reflect urgent fiscal consolidation under IMF pressure. It underscores Ecuador’s pursuit of structural reforms and signals a commitment to stabilizing public finances—even at significant social and political cost.
