* Colombia's peso hits over 7-week highs against dollar * Peru may tap capital markets this year to better manage debt * Brazil's Lula cancels trip to China * No date yet for Brazil's new fiscal framework -minister * Latam stocks up 1.5%, FX adds 0.7% (Updates prices, details) By Bansari Mayur Kamdar March 27 (Reuters) - Colombia's peso rallied over 1% as the U.S. dollar slipped on Monday, leading Latin American currencies higher for their sixth straight session as fears of a global banking crisis ebbed. Latin American markets tracked the recovery in their U.S. peers after First Citizens BancShares said it would take the deposits and loans of failed Silicon Valley Bank , helping calm fears of banking contagion. The MSCI's index for Latam currencies gained 0.7% by 1850 GMT. "What you're seeing today is not necessarily a return to risk appetite or anything major like that, but the nature of last week's chaos did give a bad taste and reminder of what 2008 was like," said Juan Perez, director of trading at Monex USA. The FX index was on track to end the first quarter 5.8% higher, outpacing EM peers, supported by a weakening dollar and firm commodity prices. The peso rose 1.4% against a subdued dollar, hitting its highest level in over seven weeks, with firm crude prices also supporting the currency of the oil producer. Investors focused on Colombia's central bank, which is expected this week to raise interest rates 25 basis points to 13%. "The MPC may complement this (25 bps) move with guidance suggesting that with such a hike the policy stance becomes significantly restrictive to lay the groundwork for eventually stopping the tightening cycle, although we do not anticipate that the MPC will explicitly close the door to further hikes," Goldman Sachs analysts said in a note. Stocks in Colombia gained 0.7%, with majority state-owned energy company Ecopetrol adding 1.6% on naming Alberto Consuegra as its interim CEO on Friday. Mexico's peso, Chilean peso and Peru's sol each gained 0.4%. Peru's government expressed qualified interest in tapping the international bond market later this year in a bid to better manage liabilities, said Economy Minister Alex Contreras. In Brazil, the real added 0.6% against the greenback, while stocks advanced 1.1%. Brazil's President Luiz Inacio Lula da Silva canceled a trip to China due to medical reasons. Focus shifted to an eagerly awaited fiscal framework in Brazil, which was initially promised by Finance Minister Fernando Haddad for March but was postponed by Lula until after the planned China trip. Brazilian Institutional Relations Minister Alexandre Padilha said no date has been set for the presentation of the proposed new fiscal rules. Brazilian data showed a lower-than-expected current account deficit in February, mainly due to a decrease in factor payments. Elsewhere in emerging markets, Israel's shekel pared early gains in a volatile session after Prime Minister Benjamin Netanyahu delayed a decision on bitterly contested plans for a judicial overhaul. Key Latin American stock indexes and currencies at 1850 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 964.70 -0.77 MSCI LatAm 2107.80 1.49 Brazil Bovespa 99986.30 1.17 Mexico IPC 52914.17 0.27 Chile IPSA 5262.72 0.28 Colombia COLCAP 1114.46 0.74 Currencies Latest Daily % change Brazil real 5.2173 0.62 Mexico peso 18.3552 0.32 Chile peso 806.4 0.47 Colombia peso 4673 1.38 Peru sol 3.765 0.19 Argentina peso (interbank) 207.4100 -0.79 Argentina peso (parallel) 386 0.78 (Reporting by Bansari Mayur Kamdar and Shashwat Chauhan in Bengaluru; Editing by Alison Williams and Richard Chang)
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