* Prospective central bank moves drive moves in Latam FX
* Mexican peso down 2% to six month low
* Brazil's real hit new low of 4.67 per dollar
* Argentina cenbank cuts benchmark rate to 38%
* Colombia's peso hit record low as oil slides
By Susan Mathew
March 6 (Reuters) - Mexico's peso slumped 2% to a six-month
low on Friday on bets of a steeper interest rate cut, while most
other Latin American currencies followed suit as surging
coronavirus cases left daunting prospects for global growth.
A Citibanamex survey sees Bank of Mexico cutting its key
interest rate by 50 basis points at its monetary policy meeting
in late March, 25 basis points more than a forecast two weeks
ago, following the U.S. Federal Reserve's surprise rate cut.
In an emergency move, the Fed slashed interest rates by 50
basis points this week to help the economy combat economic
damages from the fast-spreading virus which has infected more
than 98,000 people globally and caused over 3,300 deaths,
forcing suspension of a worrying amount of economic activity.
"It's complicated to assess if the central bank moves are
the best response because Latam economies have little room to
provide fiscal stimulus," said Wilson Ferrarezi, an analyst with
TS Lombard in Brazil.
Brazil's real slid as much as 1.4% to new lows of
4.67 per dollar, taking no solace from a dollar in the doldrums.
Brazil confirmed its eighth coronavirus case on Thursday,
including the first instances of likely local transmission,
strengthening speculation of a interest rate cut to a record
low.
"The key thing to monitor in Brazil is how the central bank
will gauge the net effect of lower domestic growth given this
complicated external scenario, and the eventual effect of the
weaker currency on Brazilian inflation," said TS Lombard's
Ferrarezi.
"It's hard to make any measurements because rates have never
been so low and the real so weak at the same time."
This is the currency's fourth straight session of marking
fresh all-time lows, putting it on course for a weekly loss of
nearly 4%.
Late on Thursday, Argentina's central bank cut its benchmark
rate to 38% from 40% in its eighth cut since December aimed to
help revive the economy seen as vital to avoid defaulting on its
debts.
Among regional stocks, those in Sao Paulo plunged
4.4%, while Chile's main index fell 1.8%, in line with
a rout in Wall Street futures.
OIL SLIDES
Elsewhere in the emerging market universe, the rouble
tumbled after Russia said it will not back an OPEC call for
extra oil output cuts. Moscow-listed stocks sank almost
5%.
That sent oil prices sliding, which pushed crude exporter
Colombia's peso to all-time lows of 3.59 per dollar.
Chile's peso weakened 0.4%. Chile consumer prices
rose 0.4% in February, the government's statistics agency said
on Friday, with annual inflation at 3.9%, nearing the upper
limit of the central bank's 2% to 4% range.
Key Latin American stock indexes and currencies at 1353 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 1015.21 -2.32
MSCI LatAm 2289.70 -3.56
Brazil Bovespa 97791.03 -4.35
Mexico IPC - -
Chile IPSA 4245.37 -1.82
Argentina MerVal - -
Colombia COLCAP - -
Currencies Latest Daily %
change
Brazil real 4.6503 0.00
Mexico peso 20.2767 -2.13
Chile peso 827.9 -0.57
Colombia peso 3574.36 -1.07
Peru sol 3.4697 -0.31
Argentina peso 62.4750 -0.09
(interbank)
(Reporting by Susan Mathew in Bengaluru;
Editing by Nick Zieminski)
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