EMERGING MARKETS-Most Latam FX gain against softer dollar; stocks track global equities higher

    * Colombia's public debt could climb the equivalent of 10%
of GDP
    * EM economies and markets running on fumes - SocGen
    * Political uncertainty weighs on Peru's sol
    * Brazil, U.S. cenbank meetings eyed this week

    By Susan Mathew
    Sept 14 (Reuters) - Latin American currencies firmed against
a weaker dollar on Monday, while lower oil prices and forecasts
for a higher debt to GDP ratio for Colombia saw its currency
underperform other major emerging market peers. 
    Crude exporter Colombia's peso was flat as demand
concerns and Libyan supply weighed on oil prices.
    Colombia's public debt could climb the equivalent of 10% of
gross domestic product this year due to the coronavirus
pandemic, the country's comptroller said on Friday, warning that
this could affect efforts to reduce poverty and unemployment.

    Most other currencies rose as the dollar slipped ahead of
the U.S. Federal Reserve's policy announcement on Wednesday. A
central bank meeting in Brazil and minutes of Chile's last rate
meeting are also awaited this week. 
    Unprecedented stimulus measures adopted globally have helped
most emerging market currencies recover fully from year-lows hit
in March when the novel coronavirus disease began wreaking
economic havoc around the world.
    But scope for further policy accommodation by EM central
banks may be dwindling, analysts at Societe Generale wrote in a
    "EM is running on fumes, suggesting downside risks exceed
upside potential," they said. 
    "EM now sorely lacks a compelling impetus for investment,
with growth drivers weak and yield compensation low... EM
currencies are running on empty without capital inflows or a
resounding macro narrative."
    Brazil's real rose 0.5%. Data showed economic
activity continued to rebound in July, but at a much slower pace
than expected.   
    On Wednesday, Brazil's central bank will likely keep its
benchmark rate unchanged and adopt a neutral view, a Reuters
poll showed. 
    The real remains one of the worst-performing EM currencies
this year. Amid worries about Brazil's fiscal standing, Economy
Mister Paulo Guedes on Monday said the government will break its
spending cap rule at some point unless mandatory spending tied
to inflation is de-indexed.
    Stocks in Sao Paulo rose, in line with global
equities, as AstraZeneca resuming the trial for its COVID-19
vaccine candidate lifted sentiment.
    MSCI's index of Latin American shares rose
    Mexico's peso hit six-month highs, while Chile's peso
 firmed 0.4%. 
    Peru's sol was flat after Congress approved a motion
to start impeachment proceedings against Peruvian President
Martin Vizcarra over leaked audio tapes and alleged ties to a
singer involved in a fraud case.
    "(The political uncertainty) will likely erode further
business sentiment and investment prospects, which may have
negative consequences in the much-needed economic recovery,"
said Credit Suisse analyst Alberto J. Rojas.
    Key Latin American stock indexes and currencies at 1416 GMT:
  Stock indexes           Latest   Daily %
 MSCI Emerging Markets    1104.53     1.17
 MSCI LatAm               1989.42     0.97
 Brazil Bovespa          99201.65     0.85
 Mexico IPC              36737.41     1.11
 Chile IPSA               3744.23     0.85
 Argentina MerVal               -        -
 Colombia COLCAP          1215.19     0.23
      Currencies          Latest   Daily %
 Brazil real               5.3067     0.48
 Mexico peso              21.0826     0.87
 Chile peso                 766.8     0.47
 Colombia peso            3704.15    -0.01
 Peru sol                  3.5658     0.17
 Argentina peso           75.1100    -0.27
 (Reporting by Susan Mathew in Bengaluru; Editing by Andrea

Nuestros Estándares: Los principios Thomson Reuters.