EMERGING MARKETS-Brazil's real rebounds after central-bank intervention, other Latam FX steady

        *
      Emerging-market central banks rush to prop up currencies


        *
      Mexico's central bank cuts rates by 25 basis points as
expected


        *
      El Salvador reaches agreement with IMF for $1.4-billion
loan


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      Latin American stocks flat, currencies up 0.5%



 (Updates with afternoon trading)
    By Lisa Pauline Mattackal and Shashwat Chauhan
       Dec 19 (Reuters) - Brazil's real rebounded from record
lows on Thursday amid continued support from the country's
central bank, while other currencies in the region stabilized a
day after the U.S. Federal Reserve's signals of fewer
interest-rate cuts next year.
    The real was up 2.8% against the U.S. dollar at
6.1163 after the central bank of Latin America's largest economy
unloaded $8 billion in spot dollar auctions.
    The move was the Brazilian central bank's latest attempt to
shore up the struggling currency after it touched an all-time
low on Wednesday in the face of a stronger dollar and a
deepening financial crisis sparked by fiscal policy concerns.
    "The approval of the spending-cut package later this week
will not be enough to reverse sentiment, in our view, and
perceptions of leniency on fiscal policy are likely to persist,"
economists at GlobalData TS Lombard wrote in a note.
    Brazil's lower house of Congress approved in a first-round
vote the main text of a constitutional amendment which is part
of the government's fiscal package.
    As expected, the U.S. central bank trimmed borrowing costs
on Wednesday by 25 basis points. However, Federal Reserve Chair
Jerome Powell said more reductions hinge on further progress in
lowering stubbornly high inflation and policymakers' projections
show they expect fewer cuts in 2025.
    "Some Latin American currencies are, in our view, likely to
weather the storm, namely those with significant differentials
in real interest rates compared to US Treasuries, high ex-ante
real rates, and elevated terms of trade, such as the (Colombian
peso) and the (Mexican peso)," analysts at Societe Generale
wrote in a note.
    "Overall, we are neutral to bullish on the (Colombian
peso)and (Mexican peso), and neutral to bearish on the (Chilean
peso) and (Brazilian real)."
    In Mexico, the country's central bank cut interest rates by
an expected 25 bps and signaled larger rate cuts could be
considered in future meetings given progress on inflation. The
peso reversed initial losses and was up 0.2% against the
dollar.
    MSCI's index of Latin American currencies
gained 0.5%, while the broader emerging-market currencies index
 languished at a more than four-month low.
    The change in the Fed's outlook will be a hurdle for
emerging markets next year, with higher rates denting the appeal
of riskier emerging-market assets and the dollar's rise likely
to drive foreign capital out of their markets and weigh on
currencies.
    The currencies' declines also sent other emerging-market
central banks rushing to prop up their currencies.
    El Salvador reached a staff-level agreement with the
International Monetary Fund on a new 40-month loan program for
about $1.4 billion. It is contingent on the implementation of
agreed reforms, including the government's handling of bitcoin.
    However, the Central American nation on Thursday stated it
would keep buying bitcoin, possibly at an accelerated pace.
    The country's sovereign hard currency bonds were trading
lower, with the 2052 maturity losing more than
1 cent on the dollar.

    HIGHLIGHTS
    ** Colombia needs additional $9.2 billion budget
adjustment-committee
    ** Brazil central bank flags unusual dollar outflows
    ** Brazil's central bank raises inflation projections,
highlights policy challenges


    Key Latin American stock indexes and currencies:


 Equities                   Latest     Daily % change
 MSCI Emerging Markets        1082.81           -1.14

 MSCI LatAm                   1890.76            0.04

 Brazil Bovespa             121126.72            0.29
 Mexico IPC                  49366.47            -1.2
 Chile IPSA                   6699.84           -0.47
 Argentina Merval           2420629.3          -3.982
                                    7
 Colombia COLCAP              1369.91             0.7

 Currencies                 Latest     Daily % change
 Brazil real                   6.1163            2.76
 Mexico peso                   20.305            0.22
 Chile peso                       991            0.23
 Colombia peso                 4377.5           -0.18
 Peru sol                       3.718            0.38
 Argentina peso                1021.5            0.10
 (interbank)
 Argentina peso (parallel)       1155            4.33






 (Reporting by Lisa Mattackal and Shashwat Chauhan in Bengaluru
and Duncan Miriri in Nairobi; Editing by Paul Simao and Rod
Nickel)