*

Latam stocks off 0.6%, FX off 0.1%

*

Peru's economy minister asks cenbank chief to be "more

proactive" in reducing interest rates

*

Brazil's Petrobras approves Chambriard as new CEO

*

Brazil's central bank chief finds growing inflation

expectations

worrisome

(Updated at 1945 GMT)

By Shashwat Chauhan and Johann M Cherian

May 24 (Reuters) - Most Latin American currencies were

set for weekly losses on Friday as crumbling expectations for

Federal Reserve interest rate cuts propped up the dollar, while

Chile's peso outpaced peers after the local central bank reduced

its pace of monetary policy easing.

Chile's peso rose nearly 1%, recovering from sharp

losses in the last two sessions, after its central bank cut its

benchmark interest rate by 50 basis points to 6.00% in a

unanimous decision, saying that it foresees further cuts to the

rate but promising to be flexible.

The decision, in line with forecasts in a traders' poll last

week, reflects an easing in the size of rate cuts after a

75-basis point cut in April and a 100-basis point cut in

January.

"Our base case is that cuts likely will continue in the near

term - at the same pace - with the rate declining further to

roughly 4.00% by Q4, assuming external conditions remain

relatively benign," said Andres Abadia, chief Latam economist at

Pantheon Macroeconomics.

Among laggards, Brazil's real slipped 0.5% after

local central bank chief Roberto Campos Neto cautioned that

increased inflation expectations have been "quite bad news" for

the regulator.

Peru's sol was flat. The country's Economy Minister

Jose Arista urged the country's central bank chief to be "more

proactive" in reducing interest rates. The copper producer has

one of the region's lowest benchmark rates at 5.75%.

MSCI's index tracking Latin American currencies

slipped 0.1%, with Colombia's peso

dipping 0.1%, while Mexico's peso inched up to 16.68 per

dollar, set for its first weekly fall in four.

The MSCI FX index is on track for its biggest weekly drop in

over a month as the greenback strengthened against a basket of

currencies on the prospects of U.S. rates remaining elevated for

longer following resilient U.S. economic data and hawkish

minutes from the Fed's last policy meeting.

On the equities front, MSCI's gauge for Latin American

stocks shed 0.5%, though set for an over 3% drop

this week.

Brazil's Bovespa dropped 0.3%, weighed by a 0.6%

decline in Petrobras' shares after the energy firm

approved the nomination of Magda Chambriard as the company's new

chief executive.

Among others, airline Azul jumped around 5% after

announcing a codeshare agreement with Gol, reigniting

speculation of a potential merger. Gol's shares were up close to

11%.

Equities in Chile, Colombia and

Argentina also posted marginal declines.

Key Latin American stock indexes and currencies:

Latin American market prices from

Reuters

Stock Latest Daily % change

indexes

MSCI Emerging 1083.50 -0.72

Markets

MSCI LatAm 2406.40 -0.56

Brazil 124321.27 -0.33

Bovespa

Mexico 55557.93 -0.64

IPC

Chile 6776.87 -0.07

IPSA

Argentina 1509487.41 -0.283

MerVal

Colombia 1404.81 -0.11

COLCAP

Currencies Latest Daily % change

Brazil 5.1684 -0.30

real

Mexico 16.6878 0.16

peso

Chile 903.9 0.81

peso

Colombia peso 3872.25 -0.06

Peru 3.7288 -0.12

sol

Argentina 890.5000 0.00

peso

(interbank)

Argentina 1200 6.67

peso

(parallel)

(Reporting by Shashwat Chauhan and Johann M Cherian in

Bengaluru

Editing by Marguerita Choy and Deepa babington)