EMERGING MARKETS-Latam FX muted, Chilean c.bank in focus

* Chile c.bank expected to hike by at least 75 bps * Latam stocks up By Ambar Warrick Oct 13 (Reuters) – Chile’s peso traded sideways ahead of a widely anticipated interest rate hike by the central bank, while most other Latin American currencies were muted against the dollar after U.S. inflation rose past expectations. The peso fell 0.1% to the dollar as investors awaited comments from the central bank on how it planned to respond to a recent spike in inflation. The bank is broadly expected to hike rates by at least 75 basis points (bps) to 2.25%, although some analysts have flagged the possibility of a 150 bps hike. “The adverse inflation result in September, the likely deterioration of inflation expectations, and the still-strong economic performance, will probably lead the bank to accelerate the removal of monetary stimulus,” Credit Suisse analysts wrote in a note. They expect the bank to hike by 100 bps. Chile’s central bank had effectively doubled rates to 1.5% in August, as a strong vaccination campaign helped spur a recovery from COVID-related restrictions. Still, the peso was trading around 17-month lows, amid pressure from weak copper prices, a shock jump in inflation, and broadly weak trends surrounding emerging markets. Other Latin American currencies were flat on Wednesday, as the dollar was boosted by U.S. consumer price data coming in slightly above expectations. The reading stoked expectations that the Federal Reserve will announce a tapering of stimulus next month, which is likely to push up interest rates in the developed world and pressure emerging markets. A director at Brazil’s central bank on Wednesday said the risk of out-of-control inflation in the United States would create a much more challenging outlook for emerging markets. Concerns over rising inflation have hurt emerging market assets in recent months, with a spike in oil prices adding more pressure on several import-reliant economies. Brazilian stocks rose 0.2% as Economy Minister Paulo Guedes said the government remained committed to pushing through tax and public administration reforms, and that medium-term fiscal sustainability remains critical. Most other regional stock indexes also rose, tracking a mild recovery in emerging market stocks. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1259.51 0.47 MSCI LatAm 2216.38 -0.04 Brazil Bovespa 112433.32 0.23 Mexico IPC 51959.34 0.24 Chile IPSA 4060.25 -1.04 Argentina MerVal 0.00 0 Colombia COLCAP 1388.51 0.15 Currencies Latest Daily % change Brazil real 5.5506 -0.26 Mexico peso 20.7338 0.20 Chile peso 823.3 -0.06 Colombia peso 3720.53 -0.04 Peru sol 4.0192 0.17 Argentina peso 99.1200 -0.02 (interbank) (Reporting by Ambar Warrick; Editing by Andrea Ricci)