Turkey unveils protection plan targeting lira deposits Chile markets take a breather after selloff Planemaker Embraer, miner Vale push Brazil stocks higher Dec 21 (Reuters) - The Turkish lira extended its rally from record low levels on Tuesday, taking support from the government"s anti-dollarization plan to stem a recent currency rout, while most Latin American currencies steadied amid an improvement in global risk appetite. The lira firmed slightly to trade at 12.86 per dollar in on Tuesday following an eye popping 25% rally on Monday after President Tayyip Erdogan unveiled steps that included plans to protect local currency savings. read more Turkey"s Finance Ministry said on Tuesday that banks would be able to offer a new instrument that would compensate account holders for the difference between currency depreciation versus a set foreign exchange rate and the yield on their deposits. The scheme would be applied to lira deposits with maturities of three to 12 months, and based on the central bank policy rate. read more "It clearly offers some reprieve for the Turkish lira, as the value of TRY deposits are guaranteed and there is no cost in the short term because the hedging is done via swap transactions," said Regis Chatellier, director of EM strategy at Oxford Economics. "But as opposed to some comments we can read at present in the market, these measures are not equivalent to a rate hike. If you combine the subsequent deterioration in public finances and inflation pressures, it is then likely that downward pressure on TRY will resume at some point." Most Latin American currencies steadied with Brazil"s real , the Colombian and Chilean pesos inching between 0.1% and 0.2% higher as overall developing world markets clawed back some of Monday"s losses. The Chilean peso firmed marginally on support from higher copper prices after sinking to 2020 lows on Monday in the wake of a resounding presidential election victory by leftist Gabriel Boric. read more Sao Paulo shares (.BVSP)gained with planemaker Embraer SA (EMBR3.SA) rising 14% after the company said it had agreed to combine its electric aircraft subsidiary Eve with Zanite SPAC and list it on the New York Stock Exchange. read more Miner Vale SA (VALE3.SA) was the top boost to the index, up 2.3%, after it announced a deal to sell its Moatize coal mine in Mozambique and a connected railway corridor for $270 million to Vulcan Minerals, a subsidiary of India"s Jindal Group. In Mexico, shares in Grupo Aeromexico (AEROMEX.MX) jumped 15%, rising sharply for the second consecutive day as the airline goes through a restructuring plan. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets (.MSCIEF) 1203.55 1.13 MSCI LatAm (.MILA00000PUS) 2072.97 0.22 Brazil Bovespa (.BVSP) 105484.39 0.44 Mexico IPC (.MXX) 52021.55 0.77 Chile IPSA (.SPIPSA) 4142.53 1.33 Argentina MerVal (.MERV) 84074.87 2.645 Colombia COLCAP (.COLCAP) 1380.58 -0.02 Currencies Latest Daily % change Brazil real 5.7395 0.08 Mexico peso 20.7976 -0.11 Chile peso 870.2 0.24 Colombia peso 3998.5 0.12 Peru sol 4.0419 0.20 Argentina peso (interbank) 102.2200 -0.09 Reporting by Sruthi Shankar and Shashank Nayar in Bengaluru; editing by Jason Neely and Chizu Nomiyama