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EMERGING MARKETS-Latam assets weaken, head for weekly falls as Evergrande worries linger

reuters.com · 09/24/2021 10:28
EMERGING MARKETS-Latam assets weaken, head for weekly falls as Evergrande worries linger

Brazilian real leads weekly declines in Latam

Chile's 2022 draft budget seeks to tame deficit -Pinera

Mexican retail sales fall in July

By Shreyashi Sanyal

- Most currencies and stocks across Latin America were subdued on Friday as questions arose about whether China Evergrande will make a key interest payment that could avoid a potential global fallout, with Brazil's real lagging its peers for the week.

The MSCI's index for Latin American currencies .MILA00000CUS was down 0.8%, with the currencies taking cues from Asian counterparts on fears that Beijing will let overseas bondholders swallow large losses as a liquidity crisis deepens at China Evergrande EGRNY. nL1N2QQ02J

Brazil's real BRBY, BRL= weakened 0.5% against the dollar in early trading a day after the Brazilian central bank's move to raise interest rates was seen as less hawkish than expected. The currency is headed for its third straight weekly decline to fall nearly 1%.

Adding to the downbeat mood, data showed consumer confidence in Brazil reached a 5-month low in September, as higher inflation, potential problems in electricity supplies and political uncertainty contributed to pessimism. nL1N2QQ0UR

"The significant rise in inflation since the beginning of the year amid still high unemployment rates are likely the main reasons behind the recent deterioration in consumer confidence," strategists at Citi Research wrote in a client note.

Brazil's central bank also detailed the credit lines that it will offer to banks at the end of the year, when emergency loans issued in 2020 to ride out the pandemic will expire. nS0N2Q100Q

The Mexican peso MXN= dipped 0.4%, set to close the week with declines of 0.6%. Data showed Mexican retail sales fell 0.4% in July from June. nAQN04OBMP

Copper producer Chile's currency CLP= was also set to end the week with declines. The country's President Sebastian Pinera unveiled an $82.1 billion draft budget for 2022 on Thursday that he said would begin to tame a ballooning deficit, following more than a year of emergency spending to combat the coronavirus pandemic. nL1N2QQ00L

The Colombian peso COP= fell 0.3%, while Peru's Sol PEN= bucked the trend to firm 0.4%.

Latin American bourses also traded decidedly in the red, with the MSCI's index .MILA00000PUS falling 1.4% and tracking its fourth straight weekly loss.

Chilean shares .SPIPSA fell 1.1%, leading declines among its peers, tracking lower copper prices. MET/L


Key Latin American stock indexes and currencies at 1405 GMT:


Stock indexes

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

1264.49

-0.63

MSCI LatAm .MILA00000PUS

2306.54

-1.24

Brazil Bovespa .BVSP

112895.24

-1.02

Mexico IPC .MXX

51366.49

-0.19

Chile IPSA .SPIPSA

4365.14

-1.06

Argentina MerVal .MERV

0.00

0

Colombia COLCAP .COLCAP

1312.27

0




Currencies

Latest

Daily % change

Brazil real BRBY

5.3353

-0.51

Mexico peso MXN=D2

20.0900

-0.23

Chile peso CLP=CL

787.5

-0.38

Colombia peso COP=

3841.14

-0.25

Peru sol PEN=PE

4.1026

-0.17

Argentina peso (interbank) ARS=RASL

98.5500

-0.01

Argentina peso (parallel) ARSB=

182

1.65



LatAm/EMRG equity performancehttps://tmsnrt.rs/3CzQCtI

(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Andrea Ricci)

((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi;))