EMERGING MARKETS-Brazil's real steady after inflation data, Hungary trims interest rates

BY Reuters | ECONOMIC | 09/26/23 11:28 AM EDT

      Brazil inflation in line with forecasts in mid-Sept

      Hungary cbank trims key rate but flags inflation risks

      Nigeria's naira hits new low on black market

    By Amruta Khandekar
       Sept 26 (Reuters) - Latin American currencies were mixed
on Tuesday with the Brazilian real steady as inflation data
eased concerns of more aggressive rate cuts, while elsewhere,
the Hungarian central bank cut interest rates but cautioned of
inflation risks.
    The Brazilian real was up 0.1% after data
showed annual inflation in Latin America's largest economy
accelerated in mid-September to 5.00%, in line with market
    Analysts said the data did little to alter expectations that
the Brazilian central bank, which delivered two 50 basis point
rate cuts since August, would carry out similar-sized rate cuts
moving forward.
    "A continuation of the current pace of rate cuts is
certainly consistent with what came out of Brazil today," said
Kieran Curtis, head of emerging market local currency debt at
    "(Recent inflation data) looks consistent with (the central
bank) being able to continue to cut rates while also not
necessarily getting to a point where you think policy is
    Brazil's central bank also emphasized a low likelihood of
larger reductions and voiced concerns over inflation
expectations not aligning with official targets.
     Prospects of tighter monetary policy in the United States
have pressured assets in resource-rich Latin America in recent
days, with the possibility of weaker demand for metals from
China given burgeoning trouble in the country's property sector
posing an additional risk.
    MSCI's index for Latin American currencies
was flat by 14:43 GMT, while the dollar was stronger but
short of a 10-month high hit earlier in the session.
    The Mexican peso and the Colombian peso
weakened 0.2% each.
    Chile's peso and the Peruvian sol, the
currencies of top copper exporters, edged 0.3% and 0.1% higher.
     Chile's central bank is expected to lower its benchmark
interest rate by 75 basis points to 8.75% at its next monetary
policy meeting in October, a poll of traders released by the
bank showed on Tuesday.
    Elsewhere, Hungary's forint rose 0.3% versus the
euro after the central bank cut its one-day deposit rate by 100
basis points to 13% on Tuesday, as expected, aligning it with
the base rate which will become the effective benchmark rate.
    National Bank of Hungary deputy governor Barnabas Virag said
tight monetary conditions were needed as inflation must continue
to decline next year.
     Nigeria's naira hit a record low on the black market on
Tuesday of 1,000 to the dollar, traders said, with unmet
foreign-currency demand on the official market and speculation
adding to downward pressure.

    Key Latin American stock indexes and currencies at 1443 GMT:

 Latin American market prices from

    Stock indexes             Latest      Daily %
 MSCI Emerging Markets          947.90         -0.99

 MSCI LatAm                    2295.98         -0.52

 Brazil Bovespa              115018.64         -0.78

 Mexico IPC                   51168.71         -0.39

 Chile IPSA                    5783.17         -0.05

 Argentina MerVal            546862.29        -0.307

 Colombia COLCAP               1091.94         -0.76

       Currencies             Latest      Daily %
 Brazil real                    4.9628          0.06

 Mexico peso                   17.4230         -0.19

 Chile peso                      899.9          0.32

 Colombia peso                 4061.37         -0.24
 Peru sol                        3.779          0.11

 Argentina peso               350.0000          0.01

 Argentina peso                    745          0.00

 (Reporting by Amruta Khandekar; Editing by Andrea Ricci)

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