*

Bank of Mexico's Mejia eyes rate cut, but cautious on

inflation

*

Latam mining stocks rise

*

Argentina clears over $52 billion in massive bond swap

*

FX up 0.5%, stocks up 1.3%

(Updated at 4pm ET/2000 GMT)

By Ankika Biswas

March 13 (Reuters) - Most commodity-linked Latin

American currencies gained against a stalling dollar on

Wednesday, with the Chilean peso in the lead, boosted by

strength in prices of key commodities including copper and crude

oil.

Top copper producer Chile's peso gained 1.4% to an

over one-month high as prices of the red metal touched their

highest level in seven months after Chinese smelters, which

process half of the world's mined copper, agreed on a joint

production cut.

Chile's peso has risen for the past two sessions, but

remains the worst performer in Latin America so far this year,

down over 7% against the dollar year-to-date.

The MSCI index tracking Latam currencies

rose 0.5% to an over two-month high, while the regional stocks

gauge jumped 1.3%.

The U.S. dollar held steady as traders looked past

hotter-than-expected inflation data on Tuesday, maintaining bets

on a Federal Reserve interest rate cut in June.

Mexico's peso leapt 0.8% to 16.6682 per dollar, its

highest level since July as oil prices rose.

Bank of Mexico Deputy Governor Omar Mejia argued in a

podcast that it is not premature to consider lowering interest

rates, despite cautioning that future cuts should remain

restrictive.

Most Latam currencies have struggled to continue their

strong performance in 2023, as markets push back the expected

timeline for U.S. rate cuts while many of the region's central

banks continue to ease policy.

"While a lot is happening at once in Latin America, the

most evident common trend is that the region's central banks led

the easing wave among EM, as the early tightening cycle led to

significant disinflation and allowed them to cut rates ahead of

the US Fed," Barclays analysts wrote.

"Now they have to be more careful as disinflation loses

steam."

Economic woes in top commodities consumer China have also

weighed on sentiment.

The currency of Peru, another top copper producer,

was also up 0.7% to a seven-month high, and Colombia's peso

climbed 0.4%.

Brazil's real pared early losses and was about flat

at 4.9735 per dollar.

Regional mining stocks gained, with Brazil's Vale

up 0.6% and Mexico's Grupo Mexico leaping over 7%.

Argentina's dollar bonds rallied after the government

cleared over $50 billion in upcoming maturities in a massive $65

billion bond swap it issued to push back debts due this year.

The 2046 bond added 2.4 cents, while the local

stock index jumped over 2%.

However, Petrobras shares dipped 1.2% as the

company continued to deal with worries about political risk

after government-appointed board members blocked an expected

extraordinary dividend payout.

Key Latin American stock indexes and currencies at 2000 GMT:

Latest Daily %

change

MSCI Emerging Markets 1046.68 -0.23

MSCI LatAm 2523.26 1.3

Brazil Bovespa 128037.38 0.29

Mexico IPC 55874.19 1.78

Chile IPSA 6491.11 -0.17

Argentina MerVal 1049712.01 2.228

Colombia COLCAP 1284.15 0.43

Currencies Latest Daily %

change

Brazil real 4.9735 0.01

Mexico peso 16.6682 0.76

Chile peso 945.4 1.41

Colombia peso 3901.13 0.43

Peru sol 3.6618 0.66

Argentina peso 849.5000 -0.06

(interbank)

Argentina peso 1015 0.49

(parallel)