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EMERGING MARKETS-Brazil's real climbs again after central bank defends rate decision

SAO PAULO, May 22 (Reuters) - Brazil's real jumped almost 1 percent on Tuesday after the central bank released meeting minutes that many traders interpreted as hawkish, while a rally in commodities prices pushed up currencies in other major Latin American economies.

Last Wednesday, Brazil's central bank unexpectedly kept the benchmark Selic rate at 6.50 percent, defying market expectations of a 25-basis-point cut.

In the minutes of that meeting released early on Tuesday, the bank said it had considered a rate cut and acknowledged that the decision came as a surprise to the market.

But the bank also 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 and called Wednesday's rate hold "the best possible decision." "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 José Francisco Gonçalves, head economist at Banco Fator in Sao Paulo.

The real had climbed 0.98 percent by late morning, following a 1.35 percent gain on Monday, after the central bank almost quadrupled the value of its currency swap program. That followed a rough streak for the real, which reached its lowest level in two years on Friday.

Elsewhere in Latin America, Chile's peso shot up some 1.27 percent, following global copper prices, which had jumped 1.45 percent by mid-day. Colombia's peso jumped 0.78 percent, boosted by prices for oil, which climbed back over $80 per barrel amid supply constraints.

Equities markets were relatively flat across the region.

Among the major winners on Brazil's benchmark Bovespa index was state electricity utility Cia Energetica de Minas Gerais SA. Its shares rose 4 percent after the nation's electricity regulator approved a power tariff hike.

Key Latin American stock indexes and currencies at 1446 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1143.56 0.62 -1.9 MSCI LatAm 2721.91 1.22 -4.92 Brazil Bovespa 81972.79 0.19 7.29 Mexico IPC 45231.07 -0.16 -8.35 Chile IPSA 5664.87 -0.05 1.80 Chile IGPA 28671.63 -0.03 2.47 Argentina MerVal 31588.50 -0.14 5.07 Colombia IGBC 12109.14 0.2 6.49 Venezuela IBC 22940.52 0.63 1716.15 Currencies daily % YTD % change change Latest Brazil real 3.6525 0.98 -9.29 Mexico peso 19.7655 0.25 -0.34 Chile peso 628.5 1.27 -2.20 Colombia peso 2852.75 0.78 4.53 Peru sol 3.274 0.27 -1.13 Argentina peso 24.3200 0.29 -23.52 (interbank) Argentina peso 25.3 0.40 -23.99 (parallel) (Reporting by Gram Slattery and Claudia Violante; Editing by Dan Grebler)