EMERGING MARKETS-Most Latam currencies decline as investors watch Xi-Biden talks

    * Brazil's real set for weekly gains
    * Currencies of crude exporters Mexico, Colombia rise
    * Russian rouble largely unchanged after central bank holds

    By Susan Mathew
    March 18 (Reuters) - Most Latin American currencies joined
broader emerging market peers in the red on Friday as talks
between leaders of the United States and China over Russia's
actions in Ukraine kept investors nervous.
    Emerging markets took a breather on Friday after optimism
around peace talks between Moscow and Kyiv had seen them rally
strongly over the last two days, putting stocks and
currencies on course for weekly gains. 
    But talks made no headway, and Russia pressed ahead with its
"special military operation" in Ukraine. 
    U.S. President Joe Biden was expected to tell Chinese
President Xi Jinping on Friday that Beijing will pay a steep
price if it supports Russia's military operations in Ukraine.

    MSCI's index of Latam currencies edged into
the red, with Brazil's real down 0.3%. But both were on
course for weekly gains. 
    Investors fretted about any potential hit to China's already
wobbly economy, and subsequently to materials demand, which
could hurt commodity exporters in Latin America. So far, Latam
has benefited from surging commodity prices as a result of
sanctions on Russia, albeit at the cost of surging inflation. 
    "Even with commodities off the boil, inflation in the next
few months in EM will be high and volatile, keeping investors
out of receivers," Citigroup strategists said. 
    In Argentina, the heavily controlled peso fell 0.2%.
The country's Senate voted late on Thursday to approve a $45
billion debt deal with the International Monetary Fund,
converting the agreement into law and ensuring that the
economically battered country can avoid another messy default.

    But, a key part of the government coalition is against the
agreement, something which increases the risks of Argentina
failing to meet the targets and making the program less credible
and hence less effective in anchoring expectations, Citi
strategists said.
    Chile's peso retreated from near three-week highs as
fourth quarter GDP rise at 12% missed expectation for a 13%
jump. Falling copper prices also hurt.
    Currencies of crude exporters Mexico and Colombia
 outperformed despite a recovering dollar, as oil prices
    Elsewhere, Russia's rouble was largely unchanged
, trading between 103 and 105 a dollar,
after the central bank held the key interest rate at 20% and
bank governor Elivra Nabiullina said inflation would remain
elevated for some time.
    Trading of local currency OFZ bonds on the Moscow exchange
will resume on Monday, she said, adding the central bank will
buy local-currency OFZ bonds.
    Key Latin American stock indexes and currencies at 1430 GMT:
   Stock indexes            Latest    Daily %
 MSCI Emerging Markets       1119.51    -0.13
 MSCI LatAm                  2447.15     0.23
 Brazil Bovespa            113864.12      0.7
 Mexico IPC                 54288.00    -0.14
 Chile IPSA                  4843.60     1.12
 Argentina MerVal           90604.84     1.07
 Colombia COLCAP             1544.23     0.08
       Currencies           Latest    Daily %
 Brazil real                  5.0546    -0.36
 Mexico peso                 20.4553     0.29
 Chile peso                    803.4    -0.55
 Colombia peso               3823.01    -0.05
 Peru sol                      3.745     0.13
 Argentina peso             109.6200    -0.09

 (Reporting by Susan Mathew in Bengaluru; editing by Jonathan