* Brazil stocks stay near record levels * Investors cheer China's banks' reserve ratios cut * Chilean peso weakens as economic activity declines in Nov. By Shreyashi Sanyal Jan 2 (Reuters) - Brazil stocks began the new year with a 1% rise on Thursday, leading Latin American stocks higher, and regional currencies also rallied despite a strong dollar as trade optimism and policy easing by China lifted global sentiment. The People's Bank of China said it was reducing the cash that banks must hold as reserves. The central bank has now cut reserve ratios eight times since early 2018 to give banks more money to lend, with economic growth slowing to its weakest pace in nearly 30 years. Markets were also encouraged by U.S. President Donald Trump's announcement on Tuesday that Phase 1 of trade deal with China would be signed on Jan. 15 at the White House. Sao Paulo's commodity-heavy Bovespa index stayed near record highs with iron ore miner Vale rising 1.2% as investors cheered the central bank's move in China, a major destination for Latin America's commodity exports. The Brazilian stock index also got a lift from financial exchange operator B3 after the company said it is introducing a new pricing structure that will reduce and simplify fees investors pay to trade stocks and over-the-counter products. MSCI's index for Latin American stocks rose 0.9% on Thursday, while the index for currencies gained 0.2%. A stronger dollar, which snapped a six-day losing streak, kept a check on further gains in emerging market currencies. Still, the Brazilian real, Mexico's peso and the Colombian peso all firmed between 0.1% and 0.8%. The Chilean peso was one of the laggards in the region as the central bank said economic activity dropped in November, led by a decline in mining activity, as the impact of nearly two months of unrest began to register in the world's top copper producer. Argentina's new government announced the issuance of $1.326 billion of dollar-denominated Treasury Bills, to be directly subscribed by the central bank, according to a decree in the official Gazette on Thursday. Key Latin American stock indexes and currencies at 1412 GMT: Stock indexes Latest Daily % change MSCI Emerging 1121.21 0.59 Markets MSCI LatAm 2942.53 0.85 Brazil Bovespa 117024.32 1.19 Mexico IPC - - Chile IPSA 4707.04 0.8 Argentina MerVal - - Colombia COLCAP - - Currencies Latest Daily % change Brazil real 4.0215 -0.23 Mexico peso 18.8730 0.28 Chile peso 754.85 -0.48 Colombia peso 3257.87 0.84 Peru sol 3.3018 0.31 Argentina peso 59.8150 0.16 (interbank) (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Will Dunham)
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