* Brazil"s real, stocks both fall 1.6% * Chile"s inflation rise strengthens rate hike bets * Mexican Congress to get proposed draft budget on Wednesday * Lawmakers pass Colombia"s tax reform bill By Susan Mathew Sept 8 (Reuters) - Brazil"s real currency and stocks fell sharply on Wednesday, a day after the country"s markets were closed for a holiday, while the Chilean peso looked to log its third straight session of steep losses as copper prices fell. Worries about a slower global economic recovery from the fallout of the coronavirus pandemic have weighed on risk sentiment recently. The real fell 1.6%, on course for its biggest percentage loss in more than five weeks, while stocks also fell by the same measure, led by miners and banks. The Brazil-heavy index of broader Latam stocks was 2% lower. Meanwhile, shares of rental car providers Localiza and Unidas jumped more than 8% each after Brazilian antitrust regulator Cade signaled it would approve their merger, albeit with some measures to avoid market concentration which analysts considered milder than expected. Chile"s peso slumped 0.9% as prices of copper, its main export, fell. The currency has lost around 2.7% so far this week, wiping out last week"s gains. Chile"s consumer prices rose 0.4% in August, data showed, while its rolling 12-month inflation hit 4.8%, above the central bank"s target range of 2%-4%. "The further rise in Chile"s inflation ... in August suggests that the central bank"s tightening cycle has a lot further to run," said Nikhil Sanghani, EM economist at Capital Economics. "We expect a further 100 basis points of rate hikes, to 2.50%, by end-2021 but, given the concerning inflation outlook, the risks are skewed towards more aggressive tightening." Mexico"s peso rose for the eighth out of the last nine sessions ahead of the presentation of the draft budget for 2022 to Congress later in the day. Mexican stocks fell 0.3%, hitting two-week lows. Colombia"s currency fell 0.4% despite rising oil prices. Colombian lawmakers passed a revised tax bill, which is set to raise $4 billion annually. Analysts say the reform will offer only short-term fiscal relief and the next government will face pressure to propose a more structural bill. A previous version of the bill, which would have increased sales tax on some goods, was withdrawn in May amid opposition from lawmakers and widespread and sometimes deadly street protests. Argentina"s Merval equity index retreated 0.7% from the all-time highs hit last session. Key Latin American stock indexes and currencies at 1426 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1315.12 -0.79 MSCI LatAm 2404.78 -2.59 Brazil Bovespa 115796.60 -1.76 Mexico IPC 51794.40 -0.3 Chile IPSA 4382.91 -1.13 Argentina MerVal 78437.64 -0.718 Colombia COLCAP 1321.77 0.06 Currencies Latest Daily % change Brazil real 5.2578 -1.56 Mexico peso 19.9310 -0.05 Chile peso 788 -0.99 Colombia peso 3813.5 -0.42 Peru sol 4.0843 -0.09 Argentina peso 98.0100 -0.02 (interbank) (Reporting by Susan Mathew in Bengaluru Editing by Paul Simao) Our Standards: The Thomson Reuters Trust Principles.