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Fed to cut rates by 25 bps in Nov and Dec- POLL

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Colombia economy could top 2% in 2024- minister

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Latam FX down 0.8%, stocks off 1.5%

By Ankika Biswas

Sept 20 (Reuters) - Most Latin American currencies fell

on Friday after recent gains, led by declines in Brazil's real,

but were on track for weekly advances on the back of deepened

risk appetite owing to a Federal Reserve interest rate cut.

The MSCI index for Latam currencies dropped

0.8% on the day, but was on track for its third straight weekly

advance. The stocks index dropped 1.5% and was

set for marginal losses.

Among the major currencies, Brazil's real dropped

over 1%, after having gained for six straight days that set it

up for its biggest weekly rise since early August.

The real had strengthened sharply on Thursday, after the

country's raised its benchmark interest rate by 25 basis points,

diverging from the U.S. and other Latin American countries that

have already embarked on a policy easing cycle.

Risk appetite has been strong of late, riding on growing

prospects of a Federal Reserve rate cut, with the U.S. central

bank delivering a larger-than-usual 50-bps cut on Wednesday,

that should give EM central banks more room to cut rates

themselves.

"Fed easing should be helpful for more net inflows into EM,

though conditional on external factors such as US hard landing

risks and elections," Citi analysts noted.

"We now expect most EM central banks to cut much less than

the US, which could be supportive for EM portfolio debt flows

and EMFX vs USD."

A Reuters poll showed the Fed will cut the federal funds

rate by 25 basis points in both November and December, according

to a strong majority of over 100 economists.

Among others, Colombia's peso weakened 0.2% after

rising for three straight days, and having touched a one-week

high in early trade.

Colombia's finance ministry sees the Andean country's 2024

economic growth at above 2%, higher than a previous forecast of

1.7%, Finance Minister Ricardo Bonilla said.

The Mexican peso dropped 0.4%, falling for the third day and

hitting a one-week low.

Both Peru's sol and Chile's peso were largely

unchanged, even as copper prices hit a two-month high. Chile's

stock market was shut for the third day on account of public

holidays.

Over in Central and Eastern Europe, Reuters polls showed the

Czech National Bank and the National Bank of Hungary are widely

expected to cut interest rates by 25 basis points each next

week.

HIGHLIGHTS:

** Brazil to tap ESG bonds to preserve Amazon, forgoing

dedicated debt, official says

** Czech president to name economist Seidler to central bank

board

** Ghana's VP and former president among 13 candidates for

presidency

Key Latin American stock indexes and currencies at 1405 GMT:

Equities Latest Daily % change

MSCI Emerging Markets 1106.5 0.58

MSCI LatAm 2244.17 -1.32

Brazil Bovespa 132557.89 -0.42

Mexico IPC 52669.66 -0.47

Chile IPSA 6323.95 -0.36

Argentina Merval 1847053.09 0.0

Colombia COLCAP 1315.35 -0.4

Currencies Latest Daily % change

Brazil real 5.4738 -1.1

Mexico peso 19.3696 -0.36

Chile peso 930.36 0

Colombia peso 4168.18 -0.16

Peru sol 3.7321 0.03

Argentina peso (interbank) 962.5 0.051948052

Argentina peso (parallel) 1220 3.278688525