*

Capital flows to EM to net $903 bln in 2024, IIF says

*

Rand weakens by more than 1% as vote count underway

(Updated at 3:30 p.m. ET/1930 GMT)

By Sruthi Shankar and Shashwat Chauhan

May 30 (Reuters) - The Mexican peso slipped for a third

straight day on Thursday with focus on the upcoming presidential

election in Latin America's second-largest economy, though a

weaker dollar on softer-than-anticipated U.S. economic data

cushioned the blow.

The peso edged 0.1% down to 16.96 per dollar,

recovering from a one-month low of 17.13 hit earlier in the

session.

The dollar and Treasury yields ticked lower after data

showed U.S. gross domestic product grew at slower pace than

previously expected in the first quarter, keeping the Federal

Reserve on track to possibly begin cutting interest rates before

the end of the year.

"Central banks in Latin America were relatively quick to

increase interest rates over the last one or two years, so they

have built in a cushion of sufficiently high interest rates,"

said Ezequiel Aguirre, head of Latam FX/FI strategy at Bank of

America.

"They should they should withstand the 'higher for longer'

aspect coming from the U.S. side."

Peru's central bank chief said that lowering interest rates

would not grow the economy without first raising the potential

growth rate. Peru's sol was last up 0.3%.

Other Latin American currencies were mixed, with including

the Colombian peso rising 0.2%, while Chile's peso

shed 0.6%.

Most polls showed ruling party hopeful Claudia Sheinbaum on

course to become the country's first woman president in Sunday's

national vote in Mexico.

"If the most likely scenario materializes, there shouldn't

be that much volatility (in the peso)," Aguirre added

The Mexican peso touched a near nine-year-high versus the

dollar last month, but has lost some steam since on concerns

about the outcome of the election and uncertainty around the

U.S. rate path.

Major developing economies are expected to see net capital

inflows rise by nearly a third to $903 billion this year, though

much of that hinges on global growth holding up, according to a

report by the Institute of International Finance.

Elsewhere, the South African rand weakened close to

2% after projections showed the governing African National

Congress (ANC) was set to lose its parliamentary majority in

this week's election, fueling uncertainty about policies under a

coalition government.

South Africa's central bank kept its main interest rate

unchanged at 8.25% as expected.

Brazilian markets were closed on account of Corpus Christi

Day.

HIGHLIGHTS:

** Suffering drought, heat, blackouts, Mexicans head to the

polls

** World Bank approves $1.2 billion budget support for Kenya

** Chile unemployment rate hits 8.5% in quarter through

April

Key Latin American stock indexes and currencies:

Latest Daily % change

MSCI Emerging Markets 1058.79 -1.24

MSCI LatAm 2360.55 -0.13

Brazil Bovespa -

-

Mexico IPC 55632.70 0.76

Chile IPSA 6635.72 -0.69

Argentina MerVal 1639745.31 4.594

Colombia COLCAP 1406.30 0.85

Currencies Latest Daily % change

Brazil real -

-

Mexico peso 16.9690 -0.12

Chile peso 916.7 -0.58

Colombia peso 3858.73 0.21

Peru sol 3.7365 0.30

Argentina peso 894.0000 0.00

(interbank)