EMERGING MARKETS-Mexican peso falls on rate cut; Brazil's real lags peers for the week

    * Mexico cuts interest rates, says outlook uncertain
    * Chilean peso rises, Colombian peso falls against dollar
    * Brazil economic activity fell 4.05% in 2020 - index

    By Shreyashi Sanyal and Shashank Nayar
    Feb 12 (Reuters) - The Mexican peso led declines among Latin
American currencies on Friday after Mexico's central bank cut
interest rates for the first time since September, while
Brazil's real underperformed its peers for the week amid
uncertainty over public accounts.
    The peso shed 0.7% against the U.S. dollar, a day
after Mexico's central bank cut its benchmark policy rate by 25
basis points to 4%. 
    Its five board members, who were unanimous on the decision,
flagged uncertainty over the economic outlook and global efforts
to tackle the COVID-19 pandemic.
    "The decision was only relevant as it might presume a
clearly more dovish approach on the part of Banxico," said
Ulrich Leuchtmann, head of FX and commodity research at
    "The fact that the remaining 'hawks' on the board also
agreed to a rate cut had probably not been expected by anyone."
    The Brazilian real dropped 0.3%, among the
only Latin American currencies set to record losses for the
    Brazil will extend pandemic emergency cash transfers to the
poor and vulnerable, Economy Minister Paulo Guedes said on
Thursday, but added that the payments must come with
compensating cost-cutting measures to avoid damage to public
    Economic activity in Brazil fell 4.05% last year, a central
bank index showed, with the economic blow from the COVID-19
pandemic for the year as a whole softened by an eighth
consecutive month of growth in December.
    Markets were also hopeful that President Joe Biden's planned
fiscal package will be passed by lawmakers soon.    
    The Chilean peso edged higher against the dollar,
while Colombia's peso dipped. 
    Emerging market currencies were subdued on Friday as the
dollar index ticked up following lower volumes in Asia
due to the Lunar New Year.
    Elsewhere in Latin America, data showed oil output from the
Vaca Muerta region in Patagonia, which stalled during the
coronavirus pandemic, hit a record high in December as producers
revved up wells with an eye on rebounding prices and a new
export market.
    The region holds the world's fourth-largest shale oil
    Key Latin American stock indexes and currencies at 1425 GMT:
         Stock indexes                   Latest      Daily
 MSCI Emerging Markets                      1426.09   -0.13
 MSCI LatAm                                 2382.26   -1.02
 Brazil Bovespa                           118437.10   -0.72
 Mexico IPC                                    0.00       0
 Chile IPSA                                 4558.62    0.23
 Argentina MerVal                          51727.19   0.141
 Colombia COLCAP                            1367.79       0
            Currencies                   Latest      Daily
 Brazil real                                 5.3938   -0.13
 Mexico peso                                20.0697   -0.63
 Chile peso                                   724.2    0.00
 Colombia peso                              3535.63   -0.31
 Peru sol                                    3.6428   -0.08
 Argentina peso (interbank)                 88.5400   -0.10
 Argentina peso (parallel)                      146    3.42
 (Reporting by Shashank Nayar and Shreyashi Sanyal in Bengaluru;
Editing by Jan Harvey)