* Mexico"s inflation climbs to 2-yr high * Brazil sees record COVID-19 deaths * Carrefour Brasil soars after BIG deal By Sruthi Shankar 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. 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 think Banxico will take a pass at a rate cut this time around," Stephen Gallo, European head of FX strategy at BMO Capital Markets said in a note. "Banxico has in the past been exceptionally orthodox in its description and defense of its inflation target...we expect that orthodoxy to play out this time around." 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 5.7%. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 1303.39 -1.54 MSCI LatAm 2277.71 -0.64 Brazil Bovespa 114162.64 0.8 Mexico IPC 46680.13 0.04 Chile IPSA 4804.30 0.03 Argentina MerVal 48615.26 -1.16 Colombia COLCAP 1326.98 0.54 Currencies Latest Daily % change Brazil real 5.5403 -0.45 Mexico peso 20.8680 -0.04 Chile peso 721.6 0.12 Colombia peso 3632.53 -0.43 Peru sol 3.7227 -0.08 Argentina peso (interbank) 91.6300 -0.07 (Reporting by Sruthi Shankar in Bengaluru)