Mexico peso wilts with bleak central bank growth outlook

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MEXICO CITY, Nov 28 (Reuters) - Mexico's peso weakened on Friday after a warning by the central bank that risks to the economy are rising and worries that the sharp downturn in the United States could push Mexico into recession.

The peso MXN= MEX01 lost 1.75 percent at the central bank's close to 13.42 per dollar after four straight sessions of gains.

The stock market's benchmark IPC index .MXX closed up 1.65 percent to 20,534.72 points, following stocks in Wall Street higher.

Mexico's central bank held its key interest rate steady at 8.25 percent at its monthly review, as expected. But policy-makers pointed to signs of weakening private consumption and falling employment on top of a decline in exports to the United States.

"We are seeing some signs of a strong deceleration. Our risk here is that if the recession that the United States is suffering deepens, Mexico will see a very negative impact," said Victor Ceja, an analyst at Valmex brokerage in Mexico City.

Growing signs of a U.S. recession bode poorly for Mexico, which sends around 80 percent of its exports to its northern neighbor.

Worries about the local impact of the U.S. downturn have knocked nearly 19 percent off the peso's value against the dollar this year while the IPC is down more than 30 percent for the same period, even after a 12.5 percent leap this week.

In debt trading, the yield on the government's benchmark 10-year peso bond MX10YT=RR edged up 1 basis point to 9.15 percent.

In equities trading, traders said investors were rebalancing stock portfolios ahead of the end of the year and recognizing that many stocks still looked attractive after the sharp market downturn since September.

Shares of Walmex (WALMEXV.MX) rose 3.26 percent to 36.72 pesos.

Shares in Cemex (CMXCPO.MX), the world's No. 3 cement maker, gained 5.97 percent to 9.59 pesos in the stock's fifth straight session of gains. Its New York stock (CX.N) added 5.3 percent to $6.95.

Cemex has been helped by expectations it will soon reach a deal to refinance part of payments on $6.6 billion in debt. Worries it would have trouble meeting its debt payments drove the stock last week to its lowest price since early 1999.

Shares in America Movil (AMXL.MX), Latin America's biggest cell phone operator, gained 1.43 percent to 20.52 pesos. Its shares on Wall Street (AMX.N) lost 2.69 percent to $30. (Reporting by Michael O'Boyle)