* Brazil"s real flat, inflation spikes * New Chinese policy could cap metal prices * Fitch doubtful on Mexican economic recovery (Recasts with Chile"s peso, updates prices) By Susan Mathew and Ambar Warrick May 25 (Reuters) - Chile"s peso led losses across Latin American currencies on Tuesday after a Chinese crackdown on metal prices hurt copper, while Mexico"s peso dipped on a warning from Fitch over economic growth in the country. The Chilean peso fell 0.6% to a near one-month low, tracking a decline in the prices of copper- the country"s largest export. China, a major consumer of industrial metals, outlined plans to strengthen price controls on key metals, which could put a cap on prices. Still, global copper demand is expected to surge this year as more countries emerge from COVID-19 lockdowns. Mexico"s peso fell 0.3%, as ratings agency Fitch said it expects that economic recovery in the country and the Caribbean from the pandemic will lag peers given the deep economic contractions and muted recovery prospects there. Data on Tuesday showed Mexico swung to a bigger-than-expected trade surplus in April powered by record exports. Still, concerns over an economic recovery from the pandemic have been a prevalent theme for emerging markets this year, with several countries risking credit downgrades due to strained public finances and a damaging second wave of the disease. Emerging economies from Peru to Romania are in the firing line as looming U.S. tapering raises the risk of outflows from local currency bond markets, hitting a vital funding source for governments striving to recover from the coronarvirus crisis. Brazil"s real was flat, even as a more than 7% jump in inflation for the month to mid-May suggested the central bank will deliver on its pledge to raise interest rates by another 75 basis points next month to 4.25%. "There are also signs of a broader increase in goods inflation. While this inflation spike should start to unwind in the next few months, the central bank is likely to remain hawkish, with another 75bp hike in the Selic rate (to 4.25%)... in June looking almost certain," said William Jackson, chief EM economist at Capital Economics. Brazil"s central bank will do what it takes to get inflation back to target, bank chief Roberto Campos Neto said on Tuesday, reiterating the bank"s hawkish stance. Argentine markets were closed for a holiday. Elsewhere, Turkey"s lira inched closer to all-time lows after President Tayyip Erdogan replaced the central bank"s fourth policymaker in the last two months, bringing its autonomy into question. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1345.40 1.41 MSCI LatAm 2449.96 -1.27 Brazil Bovespa 123042.65 -0.8 Mexico IPC 49038.80 -0.85 Chile IPSA 4101.82 -0.32 Colombia COLCAP 1210.60 -1.39 Currencies Latest Daily % change Brazil real 5.3265 -0.02 Mexico peso 19.9006 -0.25 Chile peso 733.38 -0.55 Colombia peso 3737.25 -0.13 Peru sol 3.8208 -0.29 (Reporting by Susan Mathew in Bengaluru Editing by Mark Heinrich and Alistair Bell) Our Standards: The Thomson Reuters Trust Principles.