EMERGING MARKETS-Colombia peso bucks Latam rally after S&P cuts credit outlook
By Bruno Federowski SAO PAULO, Feb 17 (Reuters) - Colombia's peso bucked a rally in Latin American currencies on Wednesday after Standard & Poor's said it could downgrade the country's "BBB" rating. S&P revised its outlook for Colombia's rating to negative from stable on Tuesday as slumping oil prices weigh on trade and economic growth. If the agency follows through with a downgrade, it would leave the country one step away from losing its coveted investment grade. Analyst Mario Castro at Nomura Securities said in a client note he expects Colombia to be downgraded "sooner rather than later." Political difficulties amidst peace negotiations with FARC risk delaying fiscal reform, adding to pressure stemming from cheaper oil, he said. The Colombian peso and the Mexican peso had dropped to all-time lows last week, pressured by a recent tumble in oil prices to 12-year lows. Both countries depend heavily on crude exports as well as oil-related tax revenue. A rebound in crude prices lifted the Mexican peso on Wednesday as efforts led by Russia and Saudi Arabia to broker a deal to freeze output turned to Iran. Brazil's stocks and currency also advanced as shares of state-controlled oil company Petroleo Brasileiro SA rose. Reuters reported on Tuesday that state-run banks are considering converting part or all of their outstanding loans to Petrobras into equity. Traders also cheered a bill which would relieve Petrobras, as the company is known, from its obligation of participating in all new projects in the subsalt polygon oil region. Renan Calheiros, the Senate's president, said the chamber could vote on the bill as early as Wednesday. Latin American stock indexes and currencies at 1415 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 731.66 0.04 -7.9 MSCI LatAm 1733.65 1.28 -6.46 Brazil Bovespa 41615.34 1.63 -4.00 Chile IPSA 3734.88 0.55 1.49 Chile IGPA 18311.04 0.49 0.88 Currencies daily % YTD % change change Latest Brazil real 4.0356 0.80 -2.20 Mexico peso 18.7510 0.69 -8.11 Chile peso 705.8 0.48 0.55 Colombia peso 3417.72 -0.13 -7.27 Peru sol 3.5061 0.14 -2.63 Argentina peso (interbank) 14.8700 -0.13 -12.69 Argentina peso (parallel) 15.03 -0.20 -5.06 (Reporting by Bruno Federowski; Editing by Meredith Mazzilli)
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