EMERGING MARKETS-Latam FX recover; stocks mixed as inflation, growth worries remain – Reuters

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    * Colombian peso at over three-month high 
    * IMF cuts global economic growth outlook
    * Brazil markets closed for holiday

 (Updates prices)
    By Ambar Warrick and Susan Mathew
    Oct 12 (Reuters) - Latin American currencies erased session
losses on Tuesday to trade higher, with Chile's peso recovering
from 17-month lows hit on concerns that weaker Chinese demand
could depress copper prices. 
    But investors remained on edge over a global energy crunch,
as well as a possible debt crisis in China, which is a major
export destination for Latin America.
    A recent surge in oil prices raised concerns over high
inflation, which could stifle economic growth in emerging market
countries. The International Monetary Fund on Tuesday trimmed
its 2021 global growth forecast to 5.9% from a previous estimate
of 6.0%, with China's cut by 0.1 point to 8.0%.
    Stocks in the region were mixed, with those in Chile
 and Colombia losing 1%, pushing the latter
off their highest levels in over eight months, while main
indexes in Mexico and Argentina rose 0.5% and
0.3%, respectively. 
    "The IMF is concerned that surging prices will force central
banks into tightening cycles that could trigger sell-offs in
global equities," said Edward Moya, senior Americas market
analyst at OANDA.  
    An index of world stocks was 0.2% lower,
with Wall Street making muted moves.
    Currencies of oil exporters Mexico and Colombia
 have gotten some support from crude prices in recent
weeks, although analysts say this could be short-lived
    Mexico's peso rose 0.6%, pulling up from over six-month lows
as industrial output beat expectations in August. 
    Colombia's peso rallied 0.9% to over three-month
highs. Colombia's 2021 fiscal deficit may be lower than
previously projected thanks to the recovery of oil prices and
better economic growth, the government said.
    Chile's peso firmed 0.3% after having fallen up to
0.8% during the session. Copper prices dropped on fears that a
global energy crunch could stifle demand, particularly in major
consumer China.
    Investors were also anticipating an interest rate decision
from Chile's central bank on Wednesday, in which it is expected
to hike rates by 100 basis points (bps) to 2.50%, amid a recent
spike in inflation.
    "Given recent macroeconomic and financial developments, the
central bank would benefit from sending an unequivocal signal
that it is determined to stay ahead of the rapidly deteriorating
current and expected inflation dynamics," Goldman Sachs analysts
    The IMF on Tuesday also said emerging markets could face
"destabilizing capital flows" as cryptocurrencies are used to
circumvent exchange restrictions and capital controls. El
Salvador last month became the first country to adopt bitcoin as
legal tender.    
    Markets in Brazil were closed. 
    Key Latin American stock indexes and currencies:
 Stock indexes                     Latest     Daily % change
 MSCI Emerging Markets             1254.27    -0.9
 MSCI LatAm                        2221.39    0.12
 Mexico IPC                        51905.69   0.5
 Chile IPSA                        4101.34    -1.07
 Argentina MerVal                  77821.44   0.346
 Colombia COLCAP                   1391.47    -1.05
 Currencies                        Latest     Daily % change
 Mexico peso                       20.7492    0.51
 Chile peso                        821.5      0.29
 Colombia peso                     3718.4     0.86
 Peru sol                          4.0448     0.38
 Argentina peso (interbank)        99.0900    -0.14
 (Reporting by Ambar Warrick; editing by Jonathan Oatis and
Cynthia Osterman)

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