* Benchmark Selic rate seen up 75 bps * Brazil"s industrial production falls less than expected By Shashank Nayar May 5 (Reuters) - Brazil"s real led gains across Latin American currencies on Wednesday after strong economic data and on expectations of a large rate hike by the central bank, while Colombia"s peso fell further on continued protests in the country. The real rose 0.7% to 5.39 as investors bet on another 75 basis point hike in the benchmark Selic rate to 3.5%, after the bank began a tightening cycle this year to help curb elevated inflation rates and support weak fiscal conditions. The real lost almost 30% of its value last year as Brazilian interest rates were cut to a record low 2% in response to the COVID-19-induced recession, and has declined 4% so far this year as a jump in infections made investors fret over the fiscal outlook. "There is some risk that the BCB (Brazilian Central Bank) moves with a more aggressive hike today and/or continues to signal a continued pace of aggressive tightening in the near term," said Ned Rumpultin, a strategist at TD Securities. "We don"t see BRL as necessarily cheap around 5.50 - and certainly not at 5.00. For that, we think the Selic rate will need to be at least 300bps higher." Industrial production in Brazil fell in March for a second consecutive month, figures showed, but the decline was not as steep as economists expected, meaning first quarter output growth accelerated. MSCI"s index of Latin American stocks jumped 2.17% in early trade, recovering from a sharp selloff on Tuesday. Colombia"s peso fell for the fifth consecutive session, falling 0.8% to a six-month low as countrywide protests against a now withdrawn controversial tax reform were set to continue on Wednesday. Chile"s peso and Mexico"s peso were flat to the dollar despite a rise in copper and oil prices, as hints of the potential for higher U.S. interest rates weighed on high-yielding assets. Treasury Secretary Janet Yellen said on Tuesday that rate hikes may be needed to prevent overheating and quell coming inflationary pressures. The Argentine peso was largely unchanged and the Peruvian sol gained 0.2%. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1335.01 0 MSCI LatAm 2407.62 2.17 Brazil Bovespa 119524.53 1.54 Mexico IPC 48468.47 0.29 Chile IPSA 4716.80 1.45 Argentina MerVal 49091.93 0.897 Colombia COLCAP 1233.95 1.34 Currencies Latest Daily % change Brazil real 5.3923 0.73 Mexico peso 20.1880 -0.04 Chile peso 703.3 0.01 Colombia peso 3854.65 -0.75 Peru sol 3.8308 0.05 Argentina peso 93.7500 -0.03 (interbank) (Reporting by Shashank Nayar in Bengaluru; editing by Barbara Lewis) Our Standards: The Thomson Reuters Trust Principles.