May 3, 2018 / 9:45 PM / 19 days ago

EMERGING MARKETS-Argentina peso tumbles again despite cenbank moves

 (Updates prices; adds news from Brazil and Mexico)
    By Gram Slattery
    SAO PAULO, May 3 (Reuters) - The Argentine peso hit a new
record low on Thursday, dropping for the second straight day
despite a dramatic rate hike by the central bank, indicating
investors are jittery about a market-friendly transition in
Argentina.
    In afternoon trading, the currency fell nearly 8
percent to trade at 23 pesos per U.S. dollar, even as the bank
hiked the benchmark interest rate 300 basis points to 33.25
percent, its second surprise hike in less than a week.

    The bank said in a Thursday statement it would continue
using all the tools at its disposal to achieve its 15 percent
inflation target this year and could raise the interest rate
again.
    Argentina's monetary authority has also heavily intervened
in the spot market, selling about $500 million on Thursday,
according to traders, after selling the same amount the day
before.
    Elsewhere in the region, other currencies were mainly flat
against the dollar, though Colombia's peso was off 0.88
percent as prices for oil took a slide.
    Regional equities markets were all down as trade jitters
weighed on sentiment ahead of a U.S. trade visit to China, with
Brazil's benchmark Bovespa and Mexico's S&P/BMV IPC index both
down about 1.5 percent.
    Shares in Brazil's Banco BTG Pactual tumbled 2
percent on Thursday, the day after the country's largest
independent investment bank reported profits fell more than 20
percent in the latest quarter.
    In Mexico, shares of Kimberly-Clark de Mexico dropped as
much as 6.5 percent to trade at its lowest since April 2015.

    U.S. Treasury Secretary Steven Mnuchin has arrived in
Beijing for talks on tariffs, but with state media saying China
will stand up to the United States and the U.S. delegation
slated to leave as early as Friday, there is little expectation
of a breakthrough.

Key Latin American stock indexes and currencies at 2034 GMT:    
    
 Stock indexes                Latest   Daily pct   YTD pct
                                          change    change
 MSCI Emerging Markets       1,137.85      -1.18     -1.78
                                                  
 MSCI LatAm                  2,841.05      -1.85      0.46
                                                  
 Brazil Bovespa             83,288.14      -1.49      9.01
 Mexico IPC                 47,094.13       -1.5     -4.58
 Chile IPSA                  5,640.10      -0.96      1.36
 Chile IGPA                 28,413.30      -0.82      1.55
                                                  
 Argentina MerVal           29,567.99      -0.16     -1.66
 Colombia IGBC              12,353.29      -0.59      8.64
 Venezuela IBC              21,977.18       1.23   1639.88
                                                          
 Currencies                   Latest   Daily pct   YTD pct
                                          change    change
                                                  
 Brazil real                   3.5237       0.15     -5.97
 Mexico peso                  19.0630       0.14      3.34
 Chile peso                     618.1       0.06     -0.56
 Colombia peso               2,857.61      -0.88      4.35
 Peru sol                       3.272      -0.12     -1.07
 Argentina peso               22.4000      -5.36    -16.96
 (interbank)                                      
 Argentina peso (parallel)      21.45      -1.63    -10.35
                                                  
 
 (Additional reporting by Eliana Raszewski in Buenos Aires and
David Alire Garcia in Mexico City; Editing by Sandra Maler)
  
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