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Argentine rate hike back in play - source
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Brazil's IGP-10 price index rises 0.05% in March
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MercadoLibre to invest $3.6 billion in Brazil this year
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Latam FX off 0.1%, stocks up 0.3%
By Bansari Mayur Kamdar March 16 (Reuters) - The Latin American currencies index slipped in choppy trading on Thursday, as global markets grappled with concerns of a banking crisis and higher rates by the U.S. Federal Reserve. The MSCI index for Latam currencies inched 0.1% lower by 1520 GMT, as the U.S. dollar index erased some of its early losses. The dollar had rallied in the previous session on safe-haven buying after Swiss lender Credit Suisse's revelations of "weaknesses" in its financial reporting exacerbated investor worries about banks, following the collapse of Silicon Valley Bank in the U.S. last week. Credit Suisse's statement that it would borrow up to $54 billion from the Swiss National Bank to shore up liquidity restored some investor confidence on Thursday. But the European Central Bank's decision to stick to a 50-basis-point hike in interest rate limited hopes of less aggressive moves by the Federal Reserve. "Chile, Czechia, Turkey and Colombia stand out for both the size of their current account deficits and large size of banking sector inflows," said William Jackson, chief emerging markets economist at Capital Economics, in a note. "In this scenario, currencies would come under (much more) pressure and domestic demand would need to weaken to reduce current account deficits and restore external stability." Chile's peso slipped 0.3% against the greenback, while the Mexican peso fell 0.2%. In Colombia, Finance Minister Jose Antonio Ocampo said on Wednesday he was optimistic the Andean country's economy could grow by up to 2.5% this year, higher than previous estimates, citing easing inflation and a better performance from the agricultural sector, among others. The peso slipped 0.1%, with upside limited amid broader risk-off moves. The Brazilian real edged 0.3% lower after data showed inflation in Brazil as measured by the IGP-10 price index rose 0.05% in March, compared to a 0.02% increase in February. South American e-commerce and financial services giant MercadoLibre Inc said it expects to invest 19 billion reais ($3.60 billion) in Brazil in 2023, 11.5% more than the previous year. The Peruvian sol defied the market downturn and rose 0.6% against the dollar. Stocks in Latin America gained 0.3%. Argentina has put the possibility of a hike to the key interest rate back on the table, as sky-high inflation pummels consumers and fears of banking crisis contagion ripple through the market, a source told Reuters on Wednesday.
Key Latin American stock indexes and currencies at 1520 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 941.19 -0.6 MSCI LatAm 2086.33 0.27 Brazil Bovespa 103034.92 0.35 Mexico IPC 52381.53 0.57 Chile IPSA 5192.61 -0.1 Argentina MerVal 217093.67 3.465 Colombia COLCAP 1121.85 0.91 Currencies Latest Daily %
change
Brazil real 5.3022 -0.16
Mexico peso 19.0537 -0.50 Chile peso 821.4 -0.11
Colombia peso 4867.65 -0.10
Peru sol 3.7979 -0.13
Argentina peso 202.9200 -0.17
(interbank) Argentina peso 378 0.26
(parallel) (Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by
Shilpi Majumdar)
