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Latam currencies, stocks down
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Mexican central bank raises interest rate by 75 bps
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Colombia hikes interest rate by 100 bps
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Brazil central bank ups 2022 GDP growth forecast
(Updates prices, market activity, comment)
By Bansari Mayur Kamdar and Amruta Khandekar
Sept 29 (Reuters) - The Mexican peso fell on Thursday
after the country hiked its interest rates by 75 basis points as
expected, with broader Latin American currencies also down as
jitters about an economic downturn weighed on risk sentiment.
Mexico, Latin America's second largest economy,
raised
its key interest rate to a record 9.25%, following in the
footsteps of the U.S. Federal Reserve, and signalled the
possibility of more rate hikes.
Its peso fell 0.2% but was still headed for a
weekly gain after two straight weeks of losses.
"I think there could be another hike to 10.5% by the
first quarter of 2023 for Mexico. That's also the time when the
Fed may take a pause so the Mexican central bank might be
following that very closely," said Louis Lau, director of
investments at Brandes Investment Partners.
The Colombian peso was down 0.9%. The country
hiked
its benchmark interest rate by 100 basis points to 10% and
also raised its 2022 growth estimate.
Analysts surveyed by Reuters
said
inflation in the country will have risen once again in
September, pressuring the central bank to extend rate rises
beyond previous predictions.
Broader currencies declined 0.2% while
stocks fell 0.4% and are down about 4% so far
this month.
The Brazilian real, was down 0.5%. Brazil's
central government posted a bigger-than-expected primary budget
deficit in August, official data showed.
However, the country's central bank improved its
economic growth outlook for 2022 and central bank chief Roberto
Campos Neto
said
Brazil could hit its inflation target if rate cuts start in
June.
The real is headed for a decline of nearly 4% this month and
has seen volatility ahead of presidential elections.
Voters in Brazil head to the polls for a first-round
presidential vote on Oct. 2, with former President Luiz Inacio
Lula da Silva expanding his lead over the incumbent far-right
President Jair Bolsonaro in the latest polls.
"Lula is coming in when there's not a lot of room for the
government balance sheet to take on more borrowing. So I think
the market is broadly comfortable with a Lula victory," Lau
said.
Chile's peso was down 0.7% after sharp gains in the
previous session. Data showed Chile's unemployment rate came in
at 7.9% in the June-August period, flat from the quarter through
July.
Elsewhere, the Czech National Bank kept interest rates
unchanged and while Kenya's central bank raised its benchmark
lending rate.
Key Latin American stock indexes and currencies at 1930 GMT:
Stock indexes Latest Daily % change
MSCI Emerging Markets 876.01 0.02
MSCI LatAm 2038.92 -0.5
Brazil Bovespa 107567.36 -0.81
Mexico IPC 45400.83 -0.09
Chile IPSA 5034.43 -1.29
Argentina MerVal 136810.18 -0.879
Colombia COLCAP 1133.11 0.24 Currencies Latest Daily % change
Brazil real 5.3917 -0.80
Mexico peso 20.1557 -0.20
Chile peso 962.6 -0.74
Colombia peso 4522.82 -0.86
Peru sol 3.9618 -0.74
Argentina peso 147.0600 -0.13
(interbank)
Argentina peso 284 2.11
(parallel)
(Reporting by Bansari Mayur Kamdar, Susan Mathew and Amruta
Khandekar in Bengaluru; Editing by Andrea Ricci and Marguerita
Choy)
Our Standards: The Thomson Reuters Trust Principles.