* Lula backs spending cuts to meet Brazil's fiscal framework * Chilean central bank releases June policy meeting minutes * Kenya's president, IMF chief speak after tax hikes pulled * Latin American stocks up 1.1%, currencies up 1% By Johann M Cherian and Shristi Achar A July 4 (Reuters) - Brazil's real led gains among Latin American currencies on Thursday after President Luiz Inacio Lula da Silva committed his government to fiscal stability, while markets also reacted to the release of central bank policy meeting minutes in Chile. Brazil's real jumped 1.5% to 5.48 to the dollar after Lula ordered his economic team to comply with the country's fiscal framework and approved suggestions of spending cuts, the country's finance minister said. The currency jumped more than 2% on Wednesday, its biggest one-day rise since January, in the run-up to the meeting between the Brazilian leader and his economic team. The real recently suffered losses in which it depreciated to lows of more than two years on concerns of fiscal sustainability in the region's biggest economy. "Although we expect President Lula will shift to a more pragmatic discourse once he internalizes the consequences of double-digit interest rates, we are concerned this could come too late, as the debt burden escalates exponentially," said Felipe Camargo, senior economist of the global EM team at Oxford Economics. More broadly, the MSCI index that tracks Latin American currencies strengthened 1% to more than a one-week high against the dollar. Trading was thin as U.S. markets were closed due to the Independence Day holiday. Market attention is now on the U.S. government's closely watched monthly employment report on Friday, which could provide clues to the Federal Reserve's likely monetary policy path and the outlook for the dollar. Mexico's peso added 0.4%. Mexican President-elect Claudia Sheinbaum on Thursday named Omar Garcia Harfuch as security minister. Traders also parsed Sheinbaum's latest criticism of the Mexican judiciary. Concerns about judicial independence under Sheinbaum's incoming government have pushed the currency to notch its biggest quarterly drop since the COVID-19 pandemic. Chile's peso strengthened 0.8% as copper prices were steady. The South American nation is the world's largest producer of the metal. Minutes from the Chilean central bank's policy meeting last month showed it considered cutting the benchmark interest rate by 50 basis points or keeping it unchanged. The central bank opted for a 25 basis-point reduction to 5.75% at the meeting. Peru's sol inched up 0.2% in thin trading. Economy Minister Jose Arista said the copper exporter's economy likely grew between 4.5% and 5% on a year-on-year basis in May, in what would be the second consecutive month of growth. Colombia's peso added 0.3%. The MSCI index that tracks regional bourses rose 1.1% to a one-month high, aided mostly by heavy-weight Brazilian equities. Elsewhere, Kenyan President William Ruto spoke with International Monetary Fund chief Kristalina Georgieva after he withdrew proposed tax hikes after deadly protests. The hikes were central to the IMF's $3.6 billion lending programme for the East African nation, according to sources. Key Latin American stock indexes and currencies: Latin American market prices from Reuters Stock indexes Latest Daily % change MSCI Emerging Markets 1104.23 1.09 MSCI LatAm 2233.84 1.15 Brazil Bovespa 126271.19 0.48 Mexico IPC 52698.89 -0.18 Chile IPSA 6525.19 -0.14 Argentina MerVal 1614465.83 0.683 Colombia COLCAP 1386.03 0.33 Currencies Latest Daily % change Brazil real 5.4846 1.52 Mexico peso 18.0857 0.41 Chile peso 934.2 0.88 Colombia peso 4092.55 0.29 Peru sol 3.7792 0.26 Argentina peso (interbank) 913.5000 0.11 (Reporting by Johann M Cherian and Shristi Achar A in Bengaluru; Editing by Paul Simao and Matthew Lewis)
End-of-day quote Monde 04:10:00 2024-09-17 pm EDT | 5-day change | 1st Jan Change | ||
1,813,297.98 PTS | +0.02% | +81.33% | +95.04% |
Sep. 16 | Argentina markets cheer Milei's zero deficit budget | RE |
Sep. 13 | IMF chief backs regional director after Argentina tensions | RE |
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1,813,297.98 PTS | +0.02% | +81.33% | - | ||
6.1052 BRL | +0.20% | -1.80% | - | ||
5.4830 BRL | +0.03% | -2.88% | - | ||
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- Real leads Latam currencies higher as Lula adopts fiscal stability stance