(Updated at 1415 GMT)

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Lawmakers reject Colombian government's 2025 budget

proposal

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Moody's: Mexico's judicial reform could impact sovereign

rating

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MSCI Latam stocks index up 0.1%, FX up 0.3%

By Johann M Cherian

Sept 12 (Reuters) - Moves in Latin America currencies

and equities were muted on Thursday, with a rise in commodity

prices tempered by caution about the fortunes of the region's

resources-rich economies.

Brazil's real edged up 0.1%, lagging iron ore prices

which hit a one-week high on prospects of improved seasonal

demand in China . But the currency is down more than 14%

year-to-date on concerns that debt-financed fiscal spending

could risk the stability of the region's biggest economy.

Brazil's Finance Minister said on Thursday that President

Luiz Inacio Lula da Silva has requested studies to ensure that

by the end of 2026 an income tax exemption will be applied to

earnings up to 5,000 reais ($880) a month.

Meanwhile, Mexico's peso and sovereign bonds were

unchanged, while the local benchmark index added 0.5%.

Mexico's Senate on Wednesday approved a sweeping judicial

reform, which Moody's warned could have significant implications

for the nation's sovereign credit rating.

Despite Banxico being one of the last central banks in the

region to begin its monetary policy easing cycle, the peso has

underperformed peers, as investors priced in the likelihood of

weak checks and balances in the region's second biggest economy.

"Mexican President Andres Lopez Obrador's move undermines

investor confidence," said a group of analysts led by Antje

Praefcke at Commerzbank.

"It is also questionable whether the law violates the North

American Trade Agreement (USMCA). Under these conditions, the

peso is likely to remain under downward pressure," they added.

MSCI's index tracking regional currencies

climbed 0.3% against a weak dollar, while the equities index

inched up 0.1%.

Both indexes are set for losses year-to-date as global

growth worries have dimmed the demand outlook for commodities,

which are the region's top exports

The currencies of copper producers Chile firmed 0.5%

and Peru edged up 0.6%, tracking higher prices of the red

metal.

Colombia's peso was flat at 4,060 to the dollar. The

Senate's economics committee rejected the government's proposed

2025 budget, arguing that the country will not be able to raise

the proposed sum due to lower-than-projected tax collection.

Concerns around the oil exporter's increased risk to fiscal

stability due to a collapse in tax collection has weighed on the

peso - down 9% year-to-date and close to a one-year low.

Among stocks, Brazilian shares slipped 0.4% with

financials among the biggest fallers, while indexes in Chile,

, Colombia and Peru were little

changed.

Key Latin American stock indexes and currencies:

Equities Latest Daily %

change

MSCI Emerging Markets 1086.69 1.51

MSCI LatAm 2195.32 0.09

Brazil Bovespa 127252.79 -0.5

Mexico IPC 53028.86 0.66

Chile IPSA 6487.39 -0.02

Argentina Merval 1438048.3 0.08

6

Colombia COLCAP 1340.63 0.04

Currencies Latest Daily %

change

Brazil real 5.6342 0.14

Mexico peso 18.678 -0.02

Chile peso 942.95 0.5

Colombia peso 4060.06 0.02

Peru sol 3.7192 -0.1

Argentina peso 931.5 2.8448738

(interbank) 59

Argentina peso (parallel) 1340 -4.104477

612

(Reporting by Johann M Cherian in Bengaluru)