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EMERGING MARKETS-Latam currencies, stocks gain for fourth straight day

* Brazil's economy to remain weak in 2023- poll * Mexico's economy shrinks in Nov from Oct * Sri Lanka holds interest rates * Latam stocks at over 2-month high, currencies up near 1% (Updates prices, adds comment) By Amruta Khandekar Jan 25 (Reuters) - Latin American stocks and currencies rose for the fourth straight session on Wednesday, with the Brazilian real at an about one-week high even as concerns about a slowdown in the country's economic growth linger. The MSCI's index for Latin American stocks jumped 1.5% to hit its highest level in over two months. Argentina's Merval index rose 2.7%, leading gains among its Latam peers, while Brazil's Bovespa index reversed early losses to climb nearly 1%. The Latam currencies index rose 0.9%, with the Brazilian real last up 1.2% against the dollar and rising for the second straight session. The currency of Latam's largest economy has gained 4% so far in 2023 against a 4.6% annual gain in the broader regional currencies index. Investor sentiment among emerging market (EM) assets has been buoyed by China's scrapping of its strict COVID-19 rules as well as hopes that the Federal Reserve would slow the pace of its interest rate hikes as inflation eases. "The global external drivers are very strong and investors in this global context might be tempted by Brazil's super high nominal interest rate of 13.75%," said Alejo Czerwonko, chief investment officer of emerging markets Americas at UBS Global Wealth Management. "We do expect the currency to remain volatile and economic policy uncertainty to prevent a meaningful further appreciation of the real." Brazil's slowing economy will likely remain weak in 2023, a Reuters poll of economists found, with markets concerned that spending by newly elected President Luiz Inacio Lula da Silva could put Brazil's debt on an even more unsustainable path and stir inflation. Chile's peso slipped 0.2% while the Colombian peso fell 0.3% against the dollar. Both countries are due to announce interest rate decisions later this week. The Mexican peso fell 0.1%. The country's economy shrank 0.5% in November from October and expanded 3.3% from November of 2021, the national statistics agency said on Wednesday. The Peruvian sol rose 0.3%. Elsewhere, Sri Lanka's central bank held interest rates steady for a third straight meeting on Wednesday, as widely expected, saying the prevailing tight monetary stance is crucial to taming still-high inflation and restoring economic stability. Among central and eastern European currencies, the Hungarian forint rose 0.6% against the euro while the Polish zloty fell 0.1%. Polish rate-setter Ludwik Kotecki said he sees scope for some small interest rate hikes this year but doesn't believe the Monetary Policy Council will decide to raise them. Greater reliance on commodity prices, volatile currencies and less recourse to countercyclical fiscal policy could lead Latin American emerging countries to a sharper contraction than in other emerging regions, Moody's Analytics said on Wednesday. Key Latin American stock indexes and currencies at 1945 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1041.79 0.25 MSCI LatAm 2351.52 1.54 Brazil Bovespa 114139.21 0.98 Mexico IPC 54775.98 -0.17 Chile IPSA 5259.28 0.05 Argentina MerVal 258902.27 2.695 Colombia COLCAP 1301.56 -0.68 Currencies Latest Daily % change Brazil real 5.0787 1.20 Mexico peso 18.8042 -0.13 Chile peso 801.9 -0.19 Colombia peso 4527.1 -0.30 Peru sol 3.8784 0.26 Argentina peso 185.0300 -0.18 (interbank) Argentina peso 379 0.53 (parallel) (Reporting by Amruta Khandekar in Bengaluru; Editing by Elaine Hardcastle)