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EMERGING MARKETS-Argentine peso skids on FX controls; Real rises before rate decision

    * Argentine peso at record low, stocks slide 4.5%
    * Argentine FX controls to provide only temporary relief -
CS
    * Don't anticipate BRL to underperform after c.bank meeting
- Citi
    * Mexico peso up after cenbank extends credit measures
    * EM c.bank bond buying could risk reputations, credit
ratings-S&P

 (Adds details on U.S. Fed, updates prices)
    By Susan Mathew and Ambar Warrick
    Sept 16 (Reuters) - Brazil's real stayed near six-week peaks
on Wednesday ahead of an interest rate decision, while
Argentina's peso plunged further into record low territory after
the central bank tightened currency controls.
    The peso opened almost 0.1% weaker at 75.25 per
U.S. dollar, traders said, and the country risk rose 38 basis
points to 1,157. The black market peso currency plummeted 9.7%
to open at a new all-time low 145 per U.S. dollar.
    In a bid to protect Argentina's dollar reserves, the central
bank tightened controls on buying dollars in the foreign
exchange market, transactions involving dollar-denominated bonds
and credit card purchases made in foreign currency.
    "This strategy, however, may only provide some temporary
relief if rapid monetization of fiscal spending remains the
norm," said Credit Suisse's heads of Latam economics, Juan
Lorenzo Maldonado and Alberto J Rojas. 
    The government on Tuesday also unveiled an ambitious budget,
targeting a fiscal deficit of 4.5% of gross domestic product in
2021 and an economic rebound of 5.5%, as the economy struggles
in a third straight year in recession. 
    Argentine stocks plunged more than 3%.     
    Brazil's real rose 1%. At market close, the central
bank is seen holding its benchmark Selic rate at a record low of
2%, and adopting a neutral view. 
    "The reinforcement of their latest forward guidance strategy
and intent to preserve levels of monetary stimulus for the
foreseeable future would be helpful to settle the jitters in the
rates space and provide the environment to see bull flatteners
doing well," said FX strategists at Citigroup.
    "In the event that the central bank does amp up its concerns
with fiscal risks... that would stymie the chances of the curve
flattening," they said, adding that they don't see the real
underperforming given their view that the bank's communication
will stress a stable Selic path ahead.
    Elsewhere, the U.S. Federal Reserve kept interest rates
pinned near zero at the end of a two-day policy meeting, and
promised to keep them there till inflation picked up
sufficiently.
    The accommodative stance saw U.S. stocks rally, with most
regional bourses in tow. 
    Mexico's peso neared six-month peaks after the
country's central bank extended measures designed to strengthen
credit channels and provide liquidity in the financial system.
Mexican stocks did not trade on account of a holiday.

    S&P Global on Wednesday said emerging market central banks
could risk their reputations, sovereign credit ratings and even
full-blown economic crises if their bond buying is pursued
beyond the coronavirus crisis.
      
    Key Latin American stock indexes and currencies:
    
    Stock indexes             Latest     Daily % change
 MSCI Emerging Markets         1117.73               0.46
                                        
 MSCI LatAm                    2015.93               0.44
                                        
 Brazil Bovespa              100490.57               0.19
                                        
 Chile IPSA                    3713.90              -0.21
                                        
 Argentina MerVal             43115.57              -3.39
                                        
 Colombia COLCAP               1200.89                0.6 Currencies             Latest     Daily % change
 Brazil real                    5.2359               0.99
                                        
 Mexico peso                   21.0390               0.49
                                        
 Chile peso                      759.4               0.47
                                        
 Colombia peso                  3685.5               0.09
 Peru sol                       3.5257               0.60
                                        
 Argentina peso                75.2400              -0.07
 (interbank)                            
                                        
 
 (Reporting by Susan Mathew in Bengaluru; Editing by Andrea
Ricci and Diane Craft)
  
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