* Peru"s sol recovers from near record lows, stocks up 5% * Mirtha Vasquez appointed as Peru PM * Colombian peso cheers Moody"s "stable" outlook * Brazil"s Banco Inter surges 13.5% (Recasts, updates prices) By Susan Mathew Oct 7 (Reuters) - Peru"s sol jumped 1% on Thursday, while stocks surged 5% and bonds rallied after a more moderate prime minister was appointed in an official partial cabinet reshuffle by President Pedro Castillo. The sol pulled up from near record lows, while stocks hit near four-month highs after Mirtha Vasquez, a former head of Congress was sworn in as prime minister on Wednesday, replacing little-known Guido Bellido, whose brash style had rattled investors. "While still on the left, (Vasquez) should be less extreme and more conciliatory than outgoing PM Bellido," said strategists at Citi. "We believe this development should help decrease the possibility of negative tail-risks related to big institutional changes and will trigger a tactical rally in Soberanos in the short-term," they said, referring to Peru"s local currency government debt, adding that they are overweight on the bonds. Peruvian markets had taken a steep road downhill after Socialist Castillo"s surprise lead in first round elections in April, and subsequent win. Eyes are also on Peru"s central bank meeting later in the day. Credit Suisse expects a 50% basis points hike to 1.5%, which would be its second straight hike by the same measure this year. Colombia"s peso hit over one-month highs after Moody"s improved its outlook on the country to stable from negative, saying government fiscal measures and post-pandemic recovery will stabilize its debt. Moody"s maintained its rating on the country at Baa2, which comes as a relief after Fitch and S&P both downgraded Colombia"s debt to junk earlier this year. Mexico"s currency fell 0.5% to the dollar after data showed inflation blew past the central bank target in September, pointing to further rate hikes from the central bank as it struggles to rein in prices. But analysts have criticized the slow pace of hikes by the bank, with a Reuters poll forecasting more pain for the peso due to a largely restrained monetary policy and hardline government policies perceived as market-unfriendly. Concerns over rising inflation in Latam, on the back of a recent spike in oil prices and supply chain disruptions, also dampened sentiment. Brazil"s real lost 0.3%, staying close to over five-month lows hit last session. September"s inflation reading due Friday is seen coming in much stronger than the previous month. Among stocks, Brazil"s SoftBank-backed digital bank Banco Inter soared 13.5% after it hired Bank of America, Bradesco BBI, J.P. Morgan and Itau BBA to manage a listing in the United States. Chile"s benchmark index traded flat after a 2.3% surge during the session, as some material and utility stocks fell. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 1252.67 2.08 MSCI LatAm 2208.61 0.52 Brazil Bovespa 111222.16 0.6 Mexico IPC 51027.99 0.1 Chile IPSA 4129.85 -0.06 Argentina MerVal 77538.21 0.123 Colombia COLCAP 1397.72 1.15 Currencies Latest Daily % change Brazil real 5.5028 -0.32 Mexico peso 20.6461 -0.47 Chile peso 812.3 0.07 Colombia peso 3771.74 0.37 Peru sol 4.091 1.12 Argentina peso 98.9400 -0.02 (interbank) (Reporting by Ambar Warrick, Federica Urso and Susan Mathew; Editing by Mark Heinrich and Andrea Ricci) Our Standards: The Thomson Reuters Trust Principles.