EMERGING MARKETS-Colombian peso dips as new tax reform heads to Congress

By Ambar Warrick July 21 (Reuters) - Colombia's peso fell on Wednesday on fears of renewed civil unrest in the country, while most other Latin American currencies dipped as concerns persist over global growth being dented by the Delta variant of the coronavirus. The peso fell 0.3% after Colombia's government on Tuesday presented a $3.95 billion tax reform bill to Congress, even as unions and student groups sought to revive the street protests that helped scupper the reform's original iteration. The law would raise 15.2 trillion pesos per year, significantly less than the 23.4 trillion pesos sought by the government in an April proposal. Fierce anti-government protests, which had originated from discontent with the bill, ravaged Colombia earlier this year and hit stocks and the peso. The riots, combined with underlying economic weakness from the pandemic, cost Colombia two out of three of its investment-grade debt ratings. "Given that the bill does not go far enough to stabilize the fiscal and debt dynamics, the new administration will be challenged to present a new structural fiscal reform in the first two years in office worth at least 1.5% of GDP in order to shore up the debt dynamics," Goldman Sachs analysts wrote in a note. They noted that the new bill was likely to be passed by end-August. Latin American currencies broadly retreated, with MSCI's regional currency index falling about 0.1%, extending losses into a third straight session. Brazil's real fell 0.3%, leading losses as President Jair Bolsonaro said he would veto a new 5.7 billion reais ($1.09 billion) electoral fund, potentially setting him up for a clash with lawmakers whose support is crucial to fending off impeachment proceedings. A recent corruption scandal along with growing disapproval of the president has hurt the real over the past few weeks. Mexico's peso fell 0.3% as COVID cases were seen growing at an exponential rate in the country, brewing fears of a third wave that could invite more curbs on activity. The rate of new infections more than doubled from Monday to Tuesday. Latam stocks rose slightly in early trade, with the MSCI index adding 0.7%. But they were recovering from a near two-month low. Shares of Brazilian energy firm Renova Energia surged nearly 18% as Abu Dhabi's Mubadala Investment Company won the right to match any other higher bid for some assets of Renova. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1312.15 0.08 MSCI LatAm 2517.17 0.73 Brazil Bovespa 125612.12 0.17 Mexico IPC 49456.78 0.41 Chile IPSA 4337.64 1.06 Argentina MerVal - - Colombia COLCAP 1262.45 1.97 Currencies Latest Daily % change Brazil real 5.2473 -0.33 Mexico peso 20.1925 -0.27 Chile peso 758.83 -0.14 Colombia peso 3841.88 -0.27 Peru sol 3.9381 0.00 Argentina peso 96.3600 -0.02 (interbank) (Reporting by Ambar Warrick)