* Mexico"s inflation climbs to 2-yr high * Brazil sees record COVID-19 deaths * Carrefour Brasil soars after BIG deal (Updates prices throughout, adds comments) By Sruthi Shankar and Shreyashi Sanyal March 24 (Reuters) - The Mexican peso held steady against the dollar on Wednesday after four straight sessions of losses as signs of quickening inflation raised expectations that the central bank will hold interest rates after a policy meeting on Thursday. The peso also outperformed its major emerging market peers that were held down by a resurgent dollar. Mexico"s national statistics agency said consumer price inflation climbed to 4.12% during the first two weeks of March, beating the consensus forecast of 3.91%, as per a Reuters poll of analysts. The new level is the highest since the second half of May 2019 after it stood at 3.68% in late February. "This data release is probably the final nail in the coffin for Banxico"s easing cycle," said Nikhil Sanghani, Latin America economist at Capital Economics. A poll of economists earlier this week forecast the Bank of Mexico"s five-member board will likely leave interest rates unchanged for the time being, though opinions were divided. The central bank cut its benchmark interest rate by 25 basis points to 4% in February, flagging uncertainty over the outlook. "We expect it (Mexican central bank) to keep the policy rate on hold at 4.00% at tomorrow"s meeting. But with inflation likely to fall later this year, we doubt the central bank will be in a rush to hike rates anytime soon," Sanghani said. A strengthening dollar, a plunge in the Turkish lira after the abrupt removal of the central bank chief and weaker commodity prices all took a toll on developing world currencies this week. Brazil"s real extended losses for a third day after the country suffered a record 3,251 COVID-19 deaths, underlining the scale of the outbreak which is spiraling out of control, thanks to a lumpy vaccine rollout and a messy patchwork of public health restrictions. President Jair Bolsonaro said on Wednesday he will hold a weekly meeting with the state governors to discuss the pandemic. Brazil"s Bovespa stock index got a boost from a 13% surge in Carrefour Brasil"s common shares after the announcement of a 7 billion real ($1.3 billion) deal to acquire rival BIG. Smiles Fidelidade gained almost 7% after airline Gol Linhas Aereas Inteligentes raised the premium paid to shareholders in a proposed merger with its loyalty program. Gol"s shares rose 3%. Key Latin American stock indexes and currencies at 1916 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1298.78 -1.89 MSCI LatAm 2259.76 -1.43 Brazil Bovespa 113463.35 0.18 Mexico IPC 46702.49 0.09 Chile IPSA 4842.43 0.82 Argentina MerVal 48615.26 -1.16 Colombia COLCAP 1330.01 0.77 Currencies Latest Daily % change Brazil real 5.5951 -1.42 Mexico peso 20.8896 -0.28 Chile peso 727.4 -0.67 Colombia peso 3646.65 -0.82 Peru sol 3.7227 -0.08 Argentina peso 91.6300 -0.07 (interbank) Argentina peso 140 2.14 (parallel) (Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru; Editing by Nick Macfie)