* Bolivia ends a 15-year dollar peg under flexible

exchange-rate system

* Colombia, Chile, Peru stock markets closed for public

holidays

* Ethiopia reaches preliminary deal with bondholders on $1

bln debt overhaul

(Updates with late afternoon trading)

By Ragini Mathur and Purvi Agarwal

June 29 (Reuters) - Most Latin American assets were subdued

on Monday, with several bourses closed for public holidays, as

investors weighed a brief flare-up in U.S.-Iran hostilities

against signs that the fragile Middle East truce was holding

firm.

Iranian and U.S. technical teams working on the

implementation of an interim peace deal are expected to meet in

Doha in the coming days, a source said, after tit-for-tat

weekend strikes threatened to unravel the accord.

The easing in tensions offered some relief to investors,

though caution persisted across risk assets. Still, the dollar

index slipped 0.3%, reversing gains from earlier in the

session.

Resilient U.S. growth and rising prospects of

higher-for-longer interest rates in the U.S. kept the dollar at

13-month highs and on course for its biggest monthly gain in

nearly a year.

Most LatAm currencies were subdued, with MSCI's regional

currencies index flat, but remained headed for

monthly and quarterly losses.

"Key drivers for LatAm are interest rates, commodity prices,

local elections, and U.S. conditions," said Sameer Samana, head

of global equities and real assets at Wells Fargo Investment

Institute.

Commodity-linked currencies of the region remain exposed to

swings in oil and metal prices, while election calendars are

sharpening scrutiny of fiscal policy, reform prospects and

institutional risk.

Bolivia was in focus after announcing on Friday that it

would adopt a flexible exchange-rate system, effectively

devaluing its currency by ending a 15-year dollar peg.

The central bank published the exchange rate at 9.73 per

dollar, for a 29% devaluation of the official exchange rate.

The move is part of a broader effort to normalize currency

markets and restore investor confidence as Bolivia negotiates a

financing program worth at least $2.5 billion with the

International Monetary Fund and grapples with an acute shortage

of dollars.

In Brazil, the region's largest economy, the Bovespa stock

index and the real slipped 0.1% each.

Brazil's government unveiled another initiative aimed at

renegotiating consumer debt, this time targeting borrowers who

are up to date on their payments.

Mexico's main stock exchange suspended trading on Monday

morning for two hours, which the bourse later said was not

caused by the failure of its trading engine. It was up 0.9%,

with gains across broader sectors. The peso edged 0.2%

higher.

In Venezuela, residents of Caracas woke up to an aftershock

following last week's powerful earthquakes, adding another layer

of uncertainty to a fragile market backdrop marked by debt

restructuring and political risks.

The Caracas stock exchange was closed for the day. Markets

in Colombia, Chile and Peru were also shut for public holidays.

Colombian assets rallied before the results of its

presidential election where right-wing outsider Abelardo De La

Espriella won by a narrow margin last week.

"While there are reasons to be constructive on the upcoming

administration, the market is pricing an overly optimistic view

on Colombia's fundamentals, particularly on the fiscal front,"

said analysts at Deutsche Bank.

The regional stock gauge was little changed,

leaving it on track for a monthly decline. It was also headed

for a quarterly loss, which would end a five-quarter winning

streak.

Beyond Latin America, Ethiopia struck a preliminary deal

with key bondholders to restructure its defaulted $1 billion

international bond.

Ethiopia's bonds jumped 3 cents after the preliminary deal,

to bid at 109.303 cents on the dollar, their highest level since

January, Tradeweb data showed.

Key Latin American stock indexes and currencies:

Latin American market

prices from Reuters

Equities Latest Daily %

change

MSCI Emerging Markets 1709.12 0.16

MSCI LatAm 2960.5 -0.04

Brazil Bovespa 173118.86 -0.1

Mexico IPC 67834.55 0.91

Chile IPSA - -

Argentina Merval 3189433.8 2.11

2

Colombia COLCAP - -

Currencies Latest Daily %

change

Brazil real 5.1755 -0.07

Mexico peso 17.4635 0.21

Chile peso - -

Colombia peso - -

Peru sol - -

Argentina peso (interbank) 1481 -0.27

Argentina peso (parallel) 1490 0.33