*
New Colombia finmin seeks to calm market as bonds, peso
suffer
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Brazil's economic slowdown is as expected - c.bank chief
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Brazil's services activity up 1.1% in Feb, beats forecasts
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Argentina c.bank could hike rate 1,000 bps to 91% - source
By Bansari Mayur Kamdar
April 27 (Reuters) - Colombia's peso slipped on
Thursday, extending losses following the surprise ouster of
Finance Minister Jose Antonio Ocampo, while other Latin American
currencies gained as upbeat U.S. earnings lifted global
sentiment.
The peso eased 0.2% to 4663.78 per dollar, a day
after losing over 3% as President Gustavo Petro replaced Ocampo
with Ricardo Bonilla in a cabinet reshuffle.
The premium investors demand to hold the country's
international bonds soared 22 basis points to 431 bps, JPMorgan
data showed.
"The fiscal outlook remains challenging," Goldman Sachs
economists said in a note.
"The market focus will be on whether Bonilla will reaffirm
Ocampo's stance about the importance of complying with the
fiscal rule to assert his independence and bolster the
Ministry's credibility."
In Argentina, a source said the central bank could hike the
benchmark interest rate as much as 1,000 basis points to 91% to
tame high inflation and steady the country's peso which has
tumbled in popular black markets.
The Argentinian peso rose 3% to 460 per dollar in
parallel markets.
"The central bank has effectively run out of reserves, and
with inflation above 100%, the incentive to hold pesos has
deteriorated again," said Brendan McKenna, international
economist and FX strategist at Wells Fargo.
"There is a growing devaluation risk in Argentina."
The MSCI's index for Latin American currencies
rose 0.6%, with the Brazilian real
leading regional gains.
Brazil's central bank chief Roberto Campos Neto said the
country's economic slowdown is in line with expectations,
following the finance minister's warning that fiscal issues
would arise if the economy continued to lose steam due to
monetary policy.
Data showed services activity in Brazil rose 1.1% in
February from the previous month, beating expectations.
The Chilean peso and Peruvian sol added 0.4%
and 0.2%, respectively, while the Mexican peso rose 0.3%.
Stocks in Latin America advanced 1.0%
tracking global market gains, snapping their four-day losing
streak.
Elsewhere in emerging markets, Turkey's central bank (CBRT)
kept its policy rate at 8.5%, as expected, in its last policy
meeting before the May 14 elections. It stressed the importance
of supportive financial conditions to preserve economic growth
momentum.
"The weakness of the lira seen over the previous weeks, and
the CBRT's FX reserve erosion were probably the main factors
behind the decision, and the status quo message in the MPC's
statement," said Marek Drimal, lead CEEMEA strategist at Societe
Generale.
"We expect the CBRT and Turkish authorities to continue the
policy of stabilizing the lira going into the crucial election
in May."
Key Latin American stock indexes and currencies:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 971.06 0.33
MSCI LatAm 2213.13 0.96
Brazil Bovespa 102935.31 0.61
Mexico IPC 54374.59 0.65
Chile IPSA 5353.20 0.52
Argentina MerVal 305522.69 0.238
Colombia COLCAP 1168.05 -1.48
Currencies Latest Daily %
change
Brazil real 5.0091 0.98
Mexico peso 18.0800 0.32
Chile peso 801.8 0.25
Colombia peso 4659.87 -0.05
Peru sol 3.7367 -0.50
Argentina peso (interbank) 222.0200 -0.20
Argentina peso (parallel) 460 3.04
(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by
Richard Chang)
