*
Colombia c. bank ups benchmark rate to 13.25%
*
Brazil's public sector gross debt stable at 73% of GDP in
March
*
Mexican economy grows more than expected in Q1
(Adds details, updates prices throughout)
By Bansari Mayur Kamdar
April 28 (Reuters) - Stocks and currencies in Latin
America outperformed their emerging market peers in April, while
Colombia's peso fell on Friday, with the central bank's hike to
interest rates offering little to no comfort at the end of a
rough week.
The peso shed 1% against the dollar, down over 4% for
the week. Colombia's central bank board raised the benchmark
interest rate by 25 basis points to 13.25%, continuing a long
tightening cycle amid persistent inflation and significant
stability risks to the global financial system.
President Gustavo Petro replaced Finance Minister Jose Antonio Ocampo with Ricardo Bonilla in a cabinet reshuffle.
The Argentinian peso traded at 461 against the dollar in the popular black market, after falling as much as 495 per dollar this week amid rising political and economic turmoil. The central bank hiked its benchmark interest rate a huge 10 percentage points to 91% on Thursday as it tries to tame high inflation and steady the peso currency. "The macroeconomic backdrop remains very complex," said Sergio Armella, an economist at Goldman Sachs in a note. "International reserves are running low, the government’s attempts to contain price increases have been unsuccessful, inflation dynamics have deteriorated, and the authorities appear to have missed the fiscal target for the first quarter of 2023 established in the program with the IMF." Overall, the MSCI's index for Latin American currencies was set for 1.8% gains this month, outperforming its emerging market peers. The Brazilian real was the top performing Latam currency against the dollar in April.
On Friday, however, the real rose 0.5%. Brazil's economic activity surged in February from the month before, central bank data showed.
Separately, the government's debt as a share of gross domestic product remained steady at 73.0% in March from the same level in February. Currencies of copper produces were mixed as Chile's peso fell 0.5% and Peru's sol gained 0.1%. Mexico's peso added 0.3% after data showed the Mexican economy accelerated its growth rate in the first quarter, driven by a solid performance of its huge services sector and industrial production, which offset a contraction of agricultural activities. Paraguay will hold general elections on April 30, with the ruling conservative Colorado Party facing a challenge from a broad center-left coalition.
Latin American stocks also outpaced their emerging market peers this month.
Elsewhere in emerging markets, the Russian rouble firmed 2% against the dollar after the central bank held interest rates at 7.5% but kept the prospect of future rate hikes on the table.
Key Latin American stock indexes and currencies at 2000
GMT:
Stock indexes Latest Daily
%
change
MSCI Emerging Markets 977.03 0.5 MSCI LatAm 2229.23 0.42 Brazil Bovespa 104044.4 1.09 0
Mexico IPC 54970.85 0.97 Chile IPSA 5410.98 0 Argentina MerVal 296583.4 -0.076 0
Colombia COLCAP 1195.88 2.43 Currencies Latest Daily
%
change
Brazil real 4.9868 -0.16
Mexico peso 17.9855 0.23 Chile peso 805.2 -0.58
Colombia peso 4695.5 -0.98
Peru sol 3.7044 0.14
Argentina peso 222.6200 -0.27
(interbank) Argentina peso (parallel) 464 0.65 (Reporting by Bansari Mayur Kamdar and Shreyashi Sanyal in
Bengaluru
Editing by Alistair Bell)
