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EMERGING MARKETS-Hungary's forint jumps on bumper rate hike, Chilean peso rallies off record lows

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* Hungary hikes interest rate by 185 bps * Chile's peso set for best session since Nov. 2019 * Colombian peso tracks oil prices higher * Latam stocks join rally on China's COVID-19 cheer By Susan Mathew June 28 (Reuters) - Hungary's forint surged 1% on Tuesday after its key interest rate was hiked by a much bigger-than-expected 185 basis points, while the Chilean peso rallied 2.2% to pull away from record lows as copper prices rose. The National Bank of Hungary raised its base to 7.75% and pledged more hikes as the forint hit record lows this week and the inflation forecast was raised for this year and next. The median forecast in a Reuters poll had projected a 50 bps rise to 6.4%, with three economists forecasting a 100 bps move. The forint hit 395.85 per euro following the decision after having touched an all-time low of around 404 on Monday. It is down more than 7% so far in 2022. "(The decision) demonstrates that the (central bank) has now become much more concerned about rising inflation and the weakness in the forint. We think further hikes are likely, taking rates to at least 9% in the coming months," Capital Economics said in a note. Chile's peso, which has been sliding further in record low territory for the past few sessions, was on course to mark its best session in over 2-1/2 years. Copper prices jumped 1% after top consumer China halved its COVID-19 quarantine period for overseas visitors, and promised more measures to cope with economic challenges. Chile is the world's top producer of the red metal. Its currency recently has been hit by worries about demand for copper as well as protests at its biggest mining company, Codelco. The news from China spurred a risk-on mood as it allayed some fears of slowing economic growth in the world's second largest economy. MSCI's index of emerging market stocks rose 0.3% to extend gains to a fourth straight session, bolstered further by strong gains across Latin American bourses. Crude exporter Colombia saw its peso jump 1.4%. Oil prices rose over 1% as major producers Saudi Arabia and the United Arab Emirates looked unlikely to be able to boost output significantly. Brazil's real firmed another 0.7%. Its economy minister on Tuesday cut economic growth forecast to 2% from 3.5% and increased a cash transfer program. This could raise more questions about government spending and cause volatility, said Jerson Zanlorenzi Jr, head of the equities and derivatives trading desk at BTG Pactual Digital. As the dollar firmed thanks to a euro slide, most other developing world currencies fell. Key Latin American stock indexes and currencies at 1405 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1030.43 0.28 MSCI LatAm 2127.38 1.57 Brazil Bovespa 101775.06 1 Mexico IPC 48631.81 0.7 Chile IPSA 5039.12 1.11 Argentina MerVal - - Colombia COLCAP 1385.36 1.42 Currencies Latest Daily % change Brazil real 5.1971 0.71 Mexico peso 19.9904 -0.40 Chile peso 900.8 1.81 Colombia peso 4060.6 1.55 Peru sol - - Argentina peso 124.8800 -0.14 (interbank) (Reporting by Susan Mathew in Bengaluru; editing by Mark Heinrich)