for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

EMERGING MARKETS-Turkey shock waves hit Latam markets, Mexican peso slides 1%

    * Real snaps 3-day winning run
    * Peso headed for third day of falls
    * Brazil interest rate outlook shoots up 

    March 22 (Reuters) - Mexico's peso fell almost 1% and
Brazil's real broke a three-day winning run on Monday, showing
the impact of a plunge in the Turkish lira after the country's
central bank chief was ousted.
    The Mexican peso headed for its third day of
declines, trading at 20.7 per dollar, while the real
weakened by 0.9% to trade near 5.53 per dollar.
    Most emerging market currencies weakened on the news as
investors sought the safety of the U.S. dollar, although losses
outside of Turkish markets were contained.
    The Turkish lira briefly fell 15% to near record lows after
the weekend firing of Naci Agbal, which prompted fears of a
reversal of tight monetary policy that helped the Turkish
currency to outperform its rivals this year.
    The lira cut some losses to trade down 8.3%, while other
emerging market peers such as the South African rand and
eastern European currencies weakened slightly.
    "Even though EM is weaker this morning, we don't expect long
lasting contagion into Latam," Citi analysts wrote in a note.
    Brazil and Russia last week joined Turkey in raising in
interest rates as they sought to tamp down inflation, with 
expectations of higher borrowing costs in the developed world
also hurting EM currencies.
    A central bank survey of economists showed on Monday
Brazil's interest rate outlook for this year and next shot up by
half a percentage point after last week's historic rate hike.

    The real hit its strongest level against the dollar in three
weeks on Friday after worries about the government's handling of
the coronavirus pandemic and higher inflation made it among the
worst-performing emerging market currencies this year.
    Most stock markets in Latin America were also hit, with
Brazil's Bovespa falling more than 1%. 
    Planemaker Embraer, down 7%, was the biggest
decliner on the benchmark index, while airline stocks Azul
 and Gol fell 5% and 2.5%, respectively,
reflecting weakness in the travel sector globally on worries
about rising COVID-19 cases.
    Mexican stocks rose half a percent, tracking a
positive session on Wall Street.
    
    Key Latin American stock indexes and currencies:
    
                                       Latest       Daily %
                                                     change
 MSCI Emerging Markets                    1335.39       -0.11
 MSCI LatAm                               2303.01       -1.88
 Brazil Bovespa                         114946.25        -1.1
 Mexico IPC                              47293.57        0.56
 Chile IPSA                               4822.87       -0.66
 Argentina MerVal                               -           -
 Colombia COLCAP                          1324.54       -0.08 Currencies                  Latest       Daily %
                                                     change
 Brazil real                               5.5330       -0.90
 Mexico peso                              20.7003       -1.00
 Chile peso                                 715.3       -0.27
 Colombia peso                             3557.4       -0.01
 Peru sol                                       -           -
 Argentina peso (interbank)               91.5600       -0.22
                                                   
 

 (Reporting by Sruthi Shankar in Bengaluru. Editing by Jane
Merriman)
  
for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up