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Latam stocks, FX off 0.4% each

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Russian central bank holds rates at 21%

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Turkish assets continue to slide

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Colombia's peso worst hit in Latam this week

(Updates with mid-session trading)

By Shashwat Chauhan and Purvi Agarwal

March 21 (Reuters) - Most Latin American currencies

slipped on Friday as the dollar remained firm, wrapping up a

week packed with interest rate decisions, including in Brazil

and the United States.

The dollar index held on to its gains heading into

the weekend after the U.S. Federal Reserve on Wednesday

indicated that it saw no rush to cut interest rates.

Fed Chair Jerome Powell said U.S. President Donald Trump's

initial policies, including extensive import tariffs, appear to

have tilted the U.S. economy toward slower growth and at least

temporarily higher inflation.

Trump hinted at some flexibility on tariffs on Friday,

though the details remained unclear.

The higher dollar weighed on Latam currencies, with the

Brazilian real leading losses in the region. It fell 0.6%

and was set for a slight weekly decline.

Brazil's central bank raised interest rates by 100 basis

points, but signaled smaller hikes going forward.

The Mexican peso lost 0.5%, set for its biggest

weekly loss since late January.

Chile's peso weakened 0.2% ahead of an interest rate

decision later in the day, with consensus tilted toward the

central bank keeping its main lending rate at 5%.

"With inflation leveling off in Chile just below 5% -

against an inflation target of 3% - further rate cuts are

unlikely in 2025," said Thierry Wizman, global FX & rates

strategist at Macquarie.

However, Citigroup analysts said, "we believe the central

bank could still opt for a total 50bps in cuts in 2025, which we

pencil in as two 25bps in the last two quarters of the year.

"Delays in Fed cuts could delay Chile's central bank moves,

or lead to a change of guidance towards a higher terminal rate."

Colombia's peso bucked the trend, gaining 0.7%, but

was on pace to be the worst performing currency in Latin America

this week.

The currency was hit hard after Colombian Finance Minister

Diego Guevara announced his resignation on Tuesday, amid clashes

over budget cuts and just hours after lawmakers rejected a labor

reform championed by leftist President Gustavo Petro.

Meanwhile, a report said the International Monetary Fund

will discuss a new $20-billion loan for Argentina in an informal

meeting next week. The peso was flat.

Uncertainty around U.S. trade policy and worries of an

American economic slowdown have induced volatility in global

markets.

MSCI's index for Latin American stocks was

down 0.4%, along with the currencies index,

which was on track to log its first weekly loss in three weeks.

Regional stocks were mixed, while Argentina's Merval

gained 2.5%.

On a year-to-date basis, Brazil's real stands as the best

performing currency among emerging markets, while Turkey's lira

and the Indonesian rupiah have fared the

worst.

Turkish assets sold off for a third straight day, triggering

two market-wide circuit breakers on Borsa Istanbul, as the lira,

equities, and bonds extended losses following the detention of

President Tayyip Erdogan's main political rival on Wednesday.

Debt markets in other frontier countries were also under

pressure, with long-dated dollar bonds in Kenya and Egypt

sliding more than 1 cent on the dollar, Tradeweb data showed.

The Russian central bank kept its benchmark interest rate on

hold at 21% as expected and said more rate hikes were possible

as inflationary pressures have decreased but remain high.

Key Latin American stock indexes and currencies:

Equities Latest Daily %

change

MSCI Emerging Markets 1131 -0.85

MSCI LatAm 2120.74 -0.39

Brazil Bovespa 131998.4 0.03

Mexico IPC 52748.71 -0.66

Chile IPSA 7585.81 0.14

Argentina Merval 2420238.3 2.48

1

Colombia COLCAP 1597.87 -0.62

Currencies Latest Daily %

change

Brazil real 5.715 -0.62

Mexico peso 20.2345 -0.5

Chile peso 928.5 -0.22

Colombia peso 4142 0.65

Peru sol 3.633 -0.35

Argentina peso (interbank) 1068 0.09

Argentina peso (parallel) 1260 0.40