*

Brazil bank lending slows, default rate hits highest since

2018

*

Interest rate decisions awaited in U.S., Brazil this week

*

Argentine markets climb on agricultural tax cuts,

anticipated

IMF disbursement

*

Trump shortens Russia ceasefire deadline, rouble weakens

(Updates with afternoon levels)

By Purvi Agarwal, Ankita Yadav and Ragini Mathur

July 28 (Reuters) - Most Latin American currencies

weakened against a stronger dollar on Monday, as attention

turned to the August 1 deadline for U.S. tariffs, while Brazil's

Bovespa index hit a three-month low, weighed by a slide in

financial stocks.

The MSCI's Latin American currency index

slid 1% and was on track for its steepest single-day decline in

over two weeks, pressured by a spike in the U.S. dollar after

the United States secured a long-awaited agreement with the

European Union.

In Latin America, the focus remains on the region's two

largest economies - Brazil and Mexico - which are scrambling to

finalize agreements with Washington before Friday's deadline,

when new U.S. levies threatened by President Donald Trump are

set to take effect.

Brazil's real declined 0.5% to a one-week low, while

Mexico's peso weakened 1.3%, on course for its biggest

daily drop since early April.

Despite Monday's losses, the regional currency index has

delivered gains of 17% this year, largely benefiting from dollar

weakness driven by uncertainty surrounding Trump's trade

policies.

"Over the past three to four months, the dominant theme has

been a softer dollar and Latam currencies offered relatively

high yields globally, which is the primary reason they've all

performed exceptionally well," said Chris Turner, global head of

financial market research at ING.

"This quarter, however, the dollar could move just a little

bit higher, with the idea that the Federal Reserve won't cut in

September."

Chile's peso declined 0.5%, while the local stock

index fell 1.6%. The country, the world's largest

copper exporter, expects U.S. tariffs on the red metal to be

discussed within broader trade talks in Washington this week,

Finance Minister Mario Marcel said.

On the equities front, MSCI's Latin American stock index

dropped 1.8%, reaching its lowest level in more

than seven weeks, weighed down by Brazilian equities.

Financial stocks saw sharp declines, with Brasil Bolsa

Balcao plunging 3.1%, Itau Unibanco ( ITUB )

falling 2.7% and Itausa SA losing 2.3%.

The selloff followed Brazil's central bank data showing

elevated interest rates slowed credit growth in June and pushed

default rates to their highest levels since 2018.

BTG Pactual slid 2.2% after the lender said it

would acquire UK-based HSBC's ( HSBC ) operations in Uruguay for

$175 million.

Meanwhile, Argentine stocks gained 0.9%, and dollar

bonds maturing in 2029 and 2038

rose over 1 cent each on the dollar, buoyed by a government move

to lower export taxes on key agricultural goods and expectations

of an imminent cash disbursement from the International Monetary

Fund.

Investors are also awaiting central bank meetings in the

U.S., Brazil, Chile, and Colombia, alongside key economic data

in the U.S. this week.

Elsewhere, Trump set a new 10-12 day deadline for Russia

regarding its war in Ukraine. Earlier this month, Trump had

floated "very severe tariffs" on Russia if there was no peace

deal with Ukraine within 50 days.

Russia's rouble fell over 2.4% against the dollar,

over-the-counter market data showed, hitting an 11-week low.

Key Latin American stock indexes and currencies:

Latin American market prices

from Reuters

Equities Latest Daily %

change

MSCI Emerging Markets 1252.58 -0.41

MSCI LatAm 2224.09 -1.85

Brazil Bovespa 131882.93 -1.23

Mexico IPC 57074.59 -0.43

Chile IPSA 8088.06 -1.63

Argentina Merval 2217032.11 0.907

Colombia COLCAP 1758.45 2.88

Currencies Latest Daily %

change

Brazil real 5.592 -0.52

Mexico peso 18.7567 -1.27

Chile peso 967.88 -0.48

Colombia peso 4172.5 -0.89

Peru sol 3.543 0.03

Argentina peso (interbank) 1293 -0.86

Argentina peso (parallel) 1300 1.14