(Updates prices) SAO PAULO, May 22 (Reuters) - Brazil's real jumped more than 1 percent on Tuesday after central bank minutes reinforced investors' beliefs that the country's deepest monetary easing cycle in a decade was over, while other Latin American currencies also gained.
Brazil's central bank unexpectedly kept the benchmark Selic rate at 6.50 percent last week, defying market expectations of a 25-basis-point cut.
In minutes of that meeting released early Tuesday, the bank indicated that the recent strength of the U.S. dollar had reduced the likelihood of Brazilian inflation remaining below the official target for the foreseeable future. The body also indicated it would likely keep the rate steady in the near future.
"In the central bank's argument, they say that inflation expectations have become unanchored toward the upside, which is to say that it's no longer necessary to cut the Selic rate," said Jose Francisco Gonçalves, head economist at Banco Fator in Sao Paulo.
The real bid 1.2 percent stronger, following gains on Monday after the central bank almost quadrupled the value of its currency swap program. The real had previously weathered a rough streak, hitting its lowest level in two years on Friday.
Elsewhere in Latin America, Chile's peso outdid the real to rise more than 2 percent, following global copper prices that jumped more than 1 percent as fears of a U.S.-China trade war appeared to fade.
Mexico's peso rebounded slightly on Tuesday, benefiting from the weak greenback, a day after blowing past the 20 per dollar mark to a more than one-year low.
Equities markets were relatively flat across the region with the exception of Brazil's benchmark Bovespa index, which rose 1.31 percent.
Gainers included electricity utility Cia Energetica de Minas Gerais SA, whose shares rose 5 percent after the nation's electricity regulator approved a power tariff hike.
Mexico's benchmark IPC index gained 0.65 percent, rebounding from a nearly 1-1/2-year low on a wave of opportunistic buying after weeks of gradual weakening.
Key Latin American stock indexes and currencies at 2024 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 1,142.05 0.49 -1.42 MSCI LatAm 2,743.35 2.02 -3 Brazil Bovespa 82,738.88 1.13 8.29 Mexico IPC 45,600.87 0.65 -7.61 Chile IPSA 5,651.10 -0.3 1.55 Chile IGPA 28,540.84 -0.48 2.00 Argentina MerVal 30,973.72 -2.08 3.02 Colombia IGBC 12,130.18 0.38 6.68 Venezuela IBC 22,988.86 0.85 1719.98 Currencies Latest Daily YTD pct pct change change Brazil real 3.6440 1.2 -9.98 Mexico peso 19.7500 0.33 -0.26 Chile peso 623.95 2.01 -1.49 Colombia peso 2,853.05 0.77 4.52 Peru sol 3.271 0.37 -1.04 Argentina peso (interbank) 24.2750 0.47 -23.38 Argentina peso (parallel) 25.35 0.20 -24.14 (Reporting by Gram Slattery, Claudia Violante and Daina Beth Solomon; Editing by Cynthia Osterman)