*
Brazil real top decliner among Latam FX for the week
*
Mexican corporate debt issues surge in Q1, seen slowing
*
Latam FX off 0.1%, set for worst week since March
(Updates prices, adds comments)
By Bansari Mayur Kamdar and Shreyashi Sanyal
April 21 (Reuters) - The Chilean peso slid on Friday,
turning negative for the week after the Andean country unveiled
plans to nationalize its lithium industry, while a broader gauge
for currencies in Latin America eyed its worst weekly
performance in nearly a month.
The MSCI's index for Latam currencies was
down 0.1%, while regional stocks fell 0.6%.
The peso slipped 1.2% against the dollar after
Chile's President Gabriel Boric said on Thursday he would
nationalize the lithium industry to boost the South American
country's economy and protect its environment. The currency is
down 0.7% for the week.
"It puts the focus on Latam possibilities for entering not
just the mineral game, but also the tech game as the
availability of local raw materials can lead to companies
establishing manufacturing of EV and other related energy as
well as transportation tech," said Juan Perez, director of
trading at Monex.
Chilean stocks shed 3.2%, hitting their lowest level in a month. The currencies of oil exporters Mexico and Colombia edged up 0.1% and 0.4%, respectively.
Corporate bond issues in Mexico surged in the first quarter, fueled by the post-pandemic recovery of economic activity, the country's main stock exchange said on Thursday. Brazilian markets were closed on Friday for a national holiday, a day after the real currency posted its worst weekly performance in more than five months.
For the week, the real shed 2.8% amid worries about
President Luiz Inacio Lula da Silva's new fiscal framework and
disappointing economic data, making it the biggest decliner
among Latin American currencies.
"If everything goes to plan, the public debt-to-GDP ratio should stabilize but there are several ways in which the framework could fall short," said William Jackson, chief emerging markets economist at Capital Economics. "It's unclear if Lula will have the political appetite to keep spending growth restrained."
Central bank Governor Roberto Campos Neto said the bank's independence is crucial for the economy, as political pressure mounted for it to reduce borrowing costs. Peru's sol gained 0.1% and was on track to outperform its regional peers this week. Overall, economies in Latin America and the Caribbean are expected to post a combined growth of 1.2% in 2023, the United Nations economic commission for the region (ECLAC) said, a slight reduction from its previous forecast of 1.3%. Elsewhere in emerging markets, Egypt's dollar-denominated government notes extended losses, with the issue maturing in 2024 hovered near a record low, Tradeweb data showed.
Latin American stock indexes and currencies at 2010 GMT;
Stock indexes Latest Daily
%
change
MSCI Emerging Markets 980.66 -0.92
MSCI LatAm 2229.01 -0.59
Brazil Bovespa 104366.8 0.44
2
Mexico IPC 54151.02 -0.26
Chile IPSA 5227.15 -3.16
Argentina MerVal 290302.1 3.007
8
Colombia COLCAP 1215.94 -2.32
Currencies Latest Daily
%
change
Brazil real 5.0495 0.18
Mexico peso 17.9818 0.03
Chile peso 797.2 -0.69
Colombia peso 4512.94 0.39
Peru sol 3.7485 0.06
Argentina peso (interbank) 218.5000 -0.23
Argentina peso (parallel) 437 -1.14
(Reporting by Bansari Mayur Kamdar, Shreyashi Sanyal and
Shashwat Chauhan in Bengaluru; Editing by Paul Simao and Grant
McCool)
