Dec 30 (Reuters) - Brazil"s real jumped 2.2% on its last day of trade for the year on Thursday leading an index of Latin American currencies to above one-month highs, while Colombia"s peso dropped amid expectations of soaring inflation. The real is set to gain around 0.8% this month, but will end 7.4% lower for the year - its fifth straight year in the red, but faring better than most regional peers except the Mexican peso , which is down 3.2%. After having gained up to 6% earlier in the year, the real tripped, despite an aggressive tightening cycle by the central bank as investors feared it may choke growth, and as fiscal concerns rose amid populist policies by President Jair Bolsonaro ahead of elections next year. Brazil"s fiscal spending cap was waived to fund stimulus programmes. This saw the country post a larger-than-expected primary surplus in November, data on Thursday showed. read more "Brazil"s economy is in a vicious circle: low economic growth increases political pressure to increase expenditure, which leads to higher inflation... depreciation of the exchange rate, and lower economic growth," Credit Suisse analysts highlighted in a note this month. Colombia"s peso fell 0.8%, down for the fourth consecutive session and hit a near 21-month low at 4,065.41 against the dollar as forecasts from a Reuters poll showed heightening inflation pressures in part due to a minimum wage hike by the government, leading to expectations of more aggressive rate hikes. MSCI"s index of EM currencies (.MIEM00000CUS)gained 1.1% to above one-month highs, while it is down about 2.7% this year. BRL vs Latam vs EM BRL vs Latam vs EM A faster pace of monetary tightening in the United States has been pointed to as a risk factor for emerging markets, but most market experts have said the economies may be more prepared to weather it. Among other currencies, the Chilean and Argentine pesos and the Peruvian sol inched lower, while the Mexican peso gained, tracking strength in crude oil prices. EM FX Volatility EM FX Volatility MSCI"s index of Latin American stocks (.MILA00000PUS) rose above 2% with Sao Paulo stocks (.BVSP) and Chilean shares (.SPIPSA) leading gains. Brazilian insurer SulAmerica SA (SULA11.SA) jumped 6% on a deal to acquire 100% of Sompo Saude, a subsidiary of Japan"s Sompo Holdings Inc (8630.T) in Brazil. Key Latin American stock indexes and currencies at 1930 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets (.MSCIEF) 1222.72 0.39 MSCI LatAm (.MILA00000PUS) 2132.42 1.98 Brazil Bovespa (.BVSP) 105129.49 0.98 Mexico IPC (.MXX) 53113.96 0.69 Chile IPSA (.SPIPSA) 4300.12 1.17 Argentina MerVal (.MERV) 84216.82 0.25 Colombia COLCAP (.COLCAP) 1411.70 -0.29 Currencies Latest Daily % change Brazil real 5.5723 2.14 Mexico peso 20.4937 0.32 Chile peso 851.5 -0.39 Colombia peso 4065.41 -0.76 Peru sol 3.9769 -0.30 Argentina peso (interbank) 102.7300 -0.04