*

Colombia central bank surprises with 25-bps cut

*

Brazil central bank intervenes in FX market

*

Latam stocks, FX indexes both up more than 1%

(Updates with afternoon trading levels)

By Lisa Pauline Mattackal and Shashwat Chauhan

Dec 20 (Reuters) - Latin American stocks and currencies

jumped on Friday after a U.S. inflation print helped soothe some

concerns over the path of interest rates in the world's largest

economy, though indexes tracking both were set for a muted

weekly finish.

Colombia's peso was flat against the dollar after the

board of Colombia's central bank voted to cut its benchmark

interest rate by a surprise 25 basis points to 9.50%, less than

expected by the market, citing global financial pressures and

the work of other central banks to raise their own interest

rates.

MSCI's index of Latin American currencies

advanced 1.3% and gauge of regional stocks

gained 1.8%.

A closely watched U.S. inflation print showed only a

moderate monthly rise in prices in November, with a measure of

underlying inflation posting its smallest gain in six months.

That helped soothe some concerns over higher-for-longer

interest rates after the Fed spooked markets by projecting a

more cautious stance in 2025 earlier this week.

"While we and the Federal Reserve should absolutely view

today's inflation data as marginally encouraging, the key word

here is "marginally" relative to expectations," said Greg

Wilensky, head of U.S. fixed income at Janus Henderson

Investors.

"This inflation data is not enough to move the needle by

itself to cause them not to pause at the January (meeting)."

Still, the change in the Fed's outlook puts emerging markets

under more pressure at the year's end, with a rising U.S. dollar

and Treasury yields weighing on foreign demand for EM assets,

while the threat of tariffs from U.S. President-elect Trump's

incoming administration looms.

MSCI's Latam stock index is set for a near 4% weekly loss,

while the currency index was set for a flat week.

Brazil's real rose 1.3% against the dollar,

continuing to recover after sinking to all-time lows earlier in

the week, after the central bank intervened yet again via a spot

dollar auction with more scheduled later in the day.

"The plunge in the currency has been driven by a collapse in

confidence in policymaking and the public finances," said

William Jackson, chief emerging markets economist at Capital

Economics.

Investors' worries about the country's fiscal sustainability

have dented its markets in recent days. Brazil's Congress

approved a government-proposed fiscal package on Friday that

includes measures to contain spending aimed at putting the

country's finances on a more sustainable path.

Mexico's peso gained 1.3% a day after its central

bank eased policy by an expected 25 bps, one of a bevy of EM

central bank decisions this week ahead of the Christmas holiday.

Most Latin American stock indexes were steady or higher,

with Argentina's Merval outperforming with a 1.6% gain.

Both MSCI's global emerging markets currency

and stock indexes were set for their worst weekly

performance in over a month.

HIGHLIGHTS

** Russian central bank keeps rates on hold after Putin's

call for 'balance'

** Argentina economic activity down 0.7% in October, beating

expectations

** Hungary's parliament backs 2025 budget plan, deficit

target seen at risk

Key Latin American stock indexes and currencies:

MSCI Emerging Markets 1074.4 -0.68

MSCI LatAm 1915.28 1.78

Brazil Bovespa 122209.26 0.84

Mexico IPC 49696.82 0.9

Chile IPSA 6700.82 0.01

Argentina Merval 2460332.4 1.671

2

Colombia COLCAP 1374.8 0.11

Brazil real 6.0704 1.33

Mexico peso 20.0355 1.25

Chile peso 988.5 0.25

Colombia peso 4377.5

flat

Peru sol 3.729 -0.3

Argentina peso 1021.5 0.10

(interbank)

Argentina peso (parallel) 1140 3.07