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EMERGING MARKETS-Peru's sol leads Latam FX higher as dollar dips; Chile c.bank in focus

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* Chile c.bank expected to hike by at least 75 bps * Peru's sol rises almost 2% * Brazil's real reverses session losses * Chilean stocks down more than 2% (Updates to close) By Ambar Warrick and Susan Mathew Oct 13 (Reuters) - Most Latin American currencies rallied on Wednesday as the dollar tracked U.S. Treasury yields lower, with Peru's sol rising almost 2%, while Chile's peso was up nearly 1% ahead of a widely anticipated interest rate hike by the central bank. Peru's sol surged to 11-week highs, gaining for a fifth straight session after a seemingly moderate shift in President Pedro Castillo last week cheered investors. After raising the rate to 1.5% in August, Chile's central bank is broadly expected to hike rates by at least 75 basis points to 2.25%. Some analysts have flagged the possibility of a 150 bps hike. The peso moved further away from 1-1/2-year lows with investors watching for comments on how the central bank planned to respond to a recent spike in inflation. "The adverse inflation result in September, the likely deterioration of inflation expectations, and the still-strong economic performance, will probably lead the bank to accelerate the removal of monetary stimulus," Credit Suisse analysts wrote in a note. They expect the bank to hike by 100 bps. On the political front, Chilean opposition lawmakers launched impeachment proceedings against right-leaning President Sebastian Pinera on Wednesday over revelations made in the Pandora Papers. This comes ahead of presidential elections in November. Most other Latam currencies rallied as falling U.S. Treasury yields saw the dollar give up gains made after a solid rise in U.S. inflation spurred bets of faster tightening by the Federal Reserve. Minutes from central bank's last meeting showed they could start tapering in mid-November. A director at Brazil's central bank said the risk of out-of-control inflation in the United States would create a much more challenging outlook for emerging markets. Concerns over rising inflation have hurt emerging market assets in recent months, with a spike in oil prices adding more pressure on several import-reliant economies. Brazil's real reversed session losses to trade 0.5% higher, and stocks in Sao Paulo rose 1.3%. Economy Minister Paulo Guedes said the government remained committed to pushing through tax and public administration reforms, and that medium-term fiscal sustainability remains critical. Chile's main equity index hit 11-month lows, falling as much as 3%, as retailer Cencosud sank 18% despite announcing a dividend. In Colombia, the peso fell from over three-month peaks as oil prices slipped after steadying earlier in the day. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 1262.67 0.72 MSCI LatAm 2245.62 1.28 Brazil Bovespa 113676.89 1.33 Mexico IPC 51755.96 -0.15 Chile IPSA 4006.91 -2.34 Argentina MerVal 78286.87 0.461 Colombia COLCAP 1393.55 0.51 Currencies Latest Daily % change Brazil real 5.5077 0.52 Mexico peso 20.5871 0.91 Chile peso 815.6 0.72 Colombia peso 3741.4 -0.60 Peru sol 3.9653 1.53 Argentina peso 99.1200 -0.02 (interbank) (Reporting by Ambar Warrick; Editing by Andrea Ricci and Marguerita Choy)