EMERGING MARKETS-Latam FX bruised by U.S. rate jitters, Brazil's real leads declines

* Brazil's real crosses 5 to the dollar * Chile's Codelco sees copper output starting to recover * IMF fails to reach staff-level deal with Sri Lanka * Latam FX at over two-month low, down 1.1% By Amruta Khandekar and Johann M Cherian Sept 27 (Reuters) - Most Latin American currencies dropped on Wednesday, with the Brazilian real weakening past 5 per dollar for the first time in over a month as the likelihood of tighter U.S. monetary policy dampened appetite for riskier assets. MSCI's index for Latin American currencies was down 1.1% by 14:49 GMT, hitting an over two-month low. The Brazilian real crossed the 5.00 per dollar level in spot market trading for the first time since Aug. 18. It was last down 0.6% at 5.02 to the dollar. Latin American currencies have been bruised this week by growing speculation that the Federal Reserve could keep interest rates elevated for longer than expected while on the other hand, countries like Brazil have kickstarted a rate-cutting cycle. Recent inflation data from Brazil has bolstered expectations that the central bank will stick to 50-basis-point rate cuts for now and refrain from more aggressive monetary policy easing, with Brazil central bank governor Roberto Campos Neto stressing the need to bring inflation under control. "In Brazil, they're more already in the mentality of we have to cut into record-high interest rates, otherwise we risk the growth," said Juan Perez, director of trading at Monex USA. "Even though their economic numbers are not in any way gloomy, they're jumping ahead of whenever the Federal Reserve pivot may come." Brazilian stocks, however, gained 0.4% as shares of state-owned oil firm Petrobras and other energy stocks gained with oil prices rising by more than $1 amid focus on tight supply. The Mexican peso slipped 0.5%, falling for the third straight session, a day before a local monetary policy decision where the central bank is widely expected to hold its benchmark interest rate for the fourth consecutive time. The Colombian peso tumbled for the fifth straight day, down 0.4%, with markets also awaiting the country's interest rate verdict later this week. The Chilean peso fell 0.2% with the currency of the world's biggest copper producer hurt by a retreat in prices of the red metal. The chairman of Chile's Codelco noted that a recovery in output is expected to start next year. The Peruvian sol bucked the trend to rise 0.2%. Elsewhere, the Czech crown was up 0.2% against the euro after the Czech National Bank left its main interest rate unchanged. The International Monetary Fund did not reach a staff-level agreement with Sri Lanka in its first review under a $2.9 billion bailout package, the Fund said on Wednesday. Key Latin American stock indexes and currencies at 1449 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 947.97 0.08 MSCI LatAm 2267.64 -0.54 Brazil Bovespa 114700.70 0.44 Mexico IPC 51427.24 0.63 Chile IPSA 5784.84 0.39 Argentina MerVal 550688.48 1.369 Colombia COLCAP 1094.32 0.44 Currencies Latest Daily % change Brazil real 5.0215 -0.69 Mexico peso 17.6240 -0.57 Chile peso 905.2 -0.17 Colombia peso 4087.15 -0.48 Peru sol 3.7914 0.19 Argentina peso 350.0000 0.01 (interbank) Argentina peso 773 -1.94 (parallel) (Reporting by Amruta Khandekar and Johann M Cherian in Bengaluru; Editing by Andrea Ricci)