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Chile central bank to gradually lower FX forward sales
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Peru's president names four new ministers
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Mexico inflation in April at lowest since Oct 2021
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Latam FX, stocks flat
(Adds comments, updates prices throughout)
By Bansari Mayur Kamdar
April 24 (Reuters) - The Chilean peso fell to a near
two-week low on Monday on central bank plans to reduce its
forward operations and concerns over the nationalization of
Chile's lithium industry, while Argentina's peso languished at a
record low in parallel markets.
Chile's peso shed 1.4% against the dollar after the
central bank said that it will start gradually reducing its
forward dollar sales operations program. In July 2022 it
announced a $25 billion intervention in the foreign exchange
market after the peso fell to a record low.
A central bank poll of traders showed Chile's central bank
is expected to maintain the country's benchmark interest rate at
11.25% at its next monetary policy meeting in May.
Investors were also spooked by the Andean nation's move to
boost state control over its lithium industry as it seeks to
diversify from mining into batteries and other areas.
In Argentina, the parallel market peso slid 3.3% to
457 against the dollar, extending Friday's sharp losses after
President Alberto Fernández said he will not seek re-election.
"In the near-term, the key will be if the ruling Peronists
manage to muddle through with their unconventional measures to
avoid a devaluation," said Kimberley Sperrfechter, emerging
markets economist at Capital Economics.
The peso's depreciation in recent days in alternative
exchange venues, rising inflation and other economic doubts add
to political tensions ahead of this year's presidential
elections in Latin America's third largest economy.
The MSCI index for Latin American currencies and stocks were flat.
The Mexican peso was 0.1% higher against the dollar. Data showed inflation slowed in the first half of April and hit its lowest level since October 2021, fueling expectations Mexico's central bank may have completed a long cycle of interest rate hikes.
Brazil's real gained 0.4% against a weakening dollar. President Luiz Inacio Lula da Silva again criticized Brazil's interest rate levels, saying at an event in Portugal that local lending costs were excessively high. Lula's government earlier in the month presented a highly-anticipated fiscal framework bill.
"The bill did not materially change much from the original presentation of the proposal. Moreover, we believe that the BCB is likely to keep rates restrictive," said Mauricio Une, senior strategist at Rabobank. The Peruvian sol edged up 0.3% after President Dina Boluarte on Sunday swore in new ministers of justice, education, work and external trade in a surprise move. Colombia's peso extended gains by 1% for its third consecutive session, with investors focused on Friday's central bank meeting where the monetary policy committee is expected to keep rates unchanged at 13%.
Key Latin American stock indexes and currencies at 1918 GMT:
Stock indexes Latest Daily
%
change
MSCI Emerging Markets 977.14 -0.37
MSCI LatAm 2230.06 0.03
Brazil Bovespa 103893.1 -0.45
8
Mexico IPC 54584.21 0.75
Chile IPSA 5275.52 0.93
Argentina MerVal 297619.5 2.313
0
Colombia COLCAP 1226.36 0.86
Currencies Latest Daily
%
change
Brazil real 5.0402 0.37
Mexico peso 17.9695 -0.01
Chile peso 816.8 -2.40
Colombia peso 4464 1.10
Peru sol 3.7443 0.11
Argentina peso (interbank) 220.2100 -0.77
Argentina peso (parallel) 457 -3.28
(Reporting by Bansari Mayur Kamdar and Shreyashi Sanyal in Bengaluru; Editing by Alexander Smith and Nick Zieminski)
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