EMERGING MARKETS-Latam currencies steady post-Fed but Argentina's peso slides

jueves 17 de diciembre de 2015 20:44 GYT

(Adds details on currencies, Mexico, Chile rate hikes)
    By Bruno Federowski
    SAO PAULO, Dec 17 (Reuters) - Latin American currencies were
mostly steady on Thursday as traders took an increase in U.S.
interest rates as a sign of confidence in the world's largest
economy, though the Argentine peso plunged after the government
lifted currency controls.
    Argentina's peso slid over 26.5 percent, its
biggest one-day loss in decades, after the country's new
government floated the currency. Newly inducted President
Mauricio Macri has promised to implement free-market reforms to
try to revitalize the stagnant economy. 
    "Overall, it appears the government's main goal is to manage
the one-off peso devaluation while minimizing the risk of FX
overshooting," JP Morgan analyst Iker Cabiedes wrote in a client
    Trade in other markets was muted a day after the U.S.
Federal Reserve raised benchmark rates for the first time in
nearly a decade, prompting others to follow suit. 
    The Bank of Mexico increased its key lending rate by 25
basis points, its first hike in seven years, in a bid to prop up
the Mexican peso , which has slumped against the
greenback this year. 
    The currency initially rallied before closing 0.45 percent
lower at 17.0495 pesos per dollar. 
    Chile's central bank also raised its benchmark interest rate
by 25 basis points to 3.50 percent, and the Chilean peso closed
up 0.01 percent at 708.30 per dollar. 
    Although higher U.S. rates could pull investment flows away
from emerging markets, Latin American currencies mostly firmed
after the Fed announcement. Traders took comfort in Fed Chair
Janet Yellen's assurance that the U.S. central bank will proceed
slowly with any further hikes.
    Wall Street's top banks expect the Fed to next raise rates
in the first quarter of next year, a Reuters poll showed.
    "For the market, this is the best of both worlds," said
Reginaldo Galhardo, head of foreign exchange trading at Treviso
brokerage in São Paulo.
    The Brazilian real, which had already closed at the
time of the Fed announcement on Wednesday, rose 0.9 percent
while the country's Bovespa stock index advanced 0.55
    Shares of Brazil's Grupo BTG Pactual SA jumped
7.6 percent after a Supreme Court Justice said that André
Esteves, the bank's former chief executive, will be released
from prison. Esteves has been in jail since Nov. 25 on charges
of seeking to obstruct a corruption probe. 
    Latin American stock indexes and currencies at 2230 GMT:
 Stock indexes                     Latest      Daily  YTD pct
                                                 pct   change
 MSCI Emerging Markets               798.59     1.04   -16.49
 MSCI LatAm                        1,893.43     0.95   -30.58
 Brazil Bovespa                   45,261.48     0.55    -9.49
 Mexico IPC                       43,503.52     0.17     0.83
 Chile IPSA                        3,663.05     1.20    -4.88
 Chile IGPA                       18,048.73     1.08    -4.35
 Argentina MerVal                 11,938.33    -0.81    39.16
 Colombia IGBC                     8,506.65     1.12   -26.89
 Venezuela IBC                    14,463.57    -0.35   274.83
 (Reporting by Bruno Federowski, editing by G Crosse)