EMERGING MARKETS-Chilean peso rises after central bank minutes

  • 6/23/2021
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* Chile c.bank mulled rate increase at June meeting - minutes * Colombian peso reverses early gains * Brazil"s real shrugs off early losses * Argentina pushes Paris Club group of lenders deadline to 2022 (Adds comments, updates prices throughout) By Susan Mathew and Shreyashi Sanyal June 23 (Reuters) - The Chilean peso led gains among its Latin American counterparts after minutes from the country"s latest central bank meeting showed policymakers considered raising the benchmark interest rate, while the Mexican peso gained against a weaker dollar. The peso gained 0.8% after the minutes. The central bank had decided to hold the rate at its technical minimum of 0.5% where it has been for more than a year. Rising oil prices supported the Colombian and Mexican pesos as the dollar extended losses following reassurances that the U.S. Federal Reserve would not rush into policy tightening. Mexico"s peso rose to its third straight session of gains leading up to a central bank meeting on Thursday. The central bank is seen keeping its benchmark interest rate steady at 4.0% amid persistently high inflation levels in the economy as it recovers from a coronavirus pandemic slump. "We believe that the trend in hawkishness from Banxico should continue, but the devil will be in the details," said Sacha Tihanyi, head of emerging market strategy at TD Securities, citing the recent uptick in inflation trajectory. "We ... expect any positive increment in hawkish sentiment to help underpin a stabilization and rebound in the peso". As the dollar looked to extend losses to the third straight session, while Brazil"s real was flat and Peru"s sol stayed close to two-week lows. The sol has lost nearly 9% this year, weakened by presidential election uncertainty. A final winner is yet to be declared amid accusations of fraud by conservative candidate Keiko Fujimori. Washington on Tuesday called the elections fair. "While we are seeing significant political changes in Latin America, there are opportunities for active investors to benefit from the reform and demand potential of the region," strategists at Amundi Asset Management wrote. Argentina said on Tuesday it had reached an understanding with the Paris Club group of lenders for a payment bridge until March 2022 to settle some $2.4 billion it owes, and it would make a partial payment in the interim period. Mired in recession since 2018, the country is racing to push back some $45 billion in repayments owed to the IMF. Key Latin American stock indexes and currencies at 1912 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1361.43 1.08 MSCI LatAm 2657.19 1.35 Brazil Bovespa 128609.17 -0.12 Mexico IPC 50250.03 0.24 Chile IPSA 4376.64 0.12 Argentina MerVal 65819.95 -0.124 Colombia COLCAP 1246.57 0.31 Currencies Latest Daily % change Brazil real 4.9655 -0.01 Mexico peso 20.1930 0.70 Chile peso 735 0.80 Colombia peso 3781.05 -0.05 Peru sol 3.9788 0.00 Argentina peso (interbank) 95.5300 -0.03 Argentina peso (parallel) 163 1.23 (Reporting by Susan Mathew and Shreyashi Sanyal in Bengaluru; editing by Jonathan Oatis and Alistair Bell) Our Standards: The Thomson Reuters Trust Principles.

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