EMERGING MARKETS-Mexican peso at lifetime low, broader Latam assets in red

    * FX nonplussed by dollar weakness
    * Chile's peso recovers slightly 
    * Brazil's economy seen shrinking in 2020- Analyst

 (Adds comment, details on Mexico and Chile, updates prices)
    By Ambar Warrick and Susan Mathew
    March 23 (Reuters) - Mexico's peso slipped to new lows on
Monday, while most Latin American assets retreated as fears of a
deep global recession due to the coronavirus pandemic prompted
an exodus from emerging markets.
    Weakness in the dollar, following additional stimulus
measures from the U.S. Federal Reserve, did little to stem the
rout in regional currencies.
    The Mexican peso slipped about 2.8%, touching a
record low of 25.2459 to the dollar, while Brazil's real
shed more than 1%.
    As the economic ructions from the outbreak become
increasingly apparent, emerging markets face increased selling
as risk appetite declines.
    MSCI's index of Latin American stocks
plunged 7% to levels last seen in late-2004. Stocks in Brazil
, the region's largest economy, slipped 6% as major banks
sank in the face of a looming liquidity crunch.
    Brazil's central bank said on Monday it would extend loans
backed by corporate bonds to banks between March 23 and April
30, in a move to add liquidity to the financial
system.
    "The Brazilian economy relies strongly on domestic
consumption – about 65% of GDP – which will be hit very hard by
the outbreak," Wilson Ferrarezi, Brazil economist at TS Lombard
wrote in a note, adding that the country's economy would likely
shrink 1% in 2020. 
    Mexican stocks fell 2.7%, taking little support from
an emergency interest rate cut on Friday. 
    Mexico's central bank announced a 50 basis point cut - its
biggest in six years - in an out-of-cycle move, and pledged
financial market support as part of more aggressive measures to
cushion the economy from the coronavirus fallout.

    "We welcome the central bank's announcements, as we think
they will foster more orderly trading conditions in the local
fixed income market, as well as in the currency market," wrote
Credit Suisse analysts Alonso Cervera and Alberto J. Rojas in a
note.
    "We also think that given the projected sharp drop in
economic activity, the bank will continue to lower the overnight
rate by at least another 200 bps to 4.5%, in the next six
months."
    Chilean stocks tumbled nearly 6%, while the peso
 strengthened slightly against the dollar, recovering from
a near record-low. 
    Financial markets in Colombia and Argentina were closed for
local holidays.
    
    Key Latin American stock indexes and currencies at 1936 GMT:
    
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets          757.29     -5.72
                                        
 MSCI LatAm                    1373.30     -8.14
                                        
 Brazil Bovespa               62519.69     -6.78
                                        
 Mexico IPC                   33366.98     -2.63
                                        
 Chile IPSA                    2896.91     -5.86
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    5.1240      -1.2
                                        
 Mexico peso                   25.1200     -2.78
                                        
 Chile peso                      860.5      0.30
                                        
 Peru sol                       3.5317     -0.11
                                        
 

 (Reporting by Susan Mathew in Bengaluru;
Editing by Alistair Bell and Richard Chang)