EMERGING MARKETS-Latam stocks up, forex steady ahead of central bank decisions; Romania's leu drops

By Pranav Kashyap

May 7 (Reuters) - Most Latin American currencies ticked up against the dollar on Monday, as the spotlight turned to crucial central bank meetings in both the region and the United States, while Romania's leu continued to fall for the second straight day.

The MSCI gauge for Latin American currencies .MILA00000CUS was steady while its counterpart for equities .MILA00000PUS ticked up 0.11%.

In Brazil, the real BRL= fell 0.29%, poised to log its third consecutive day of declines, if losses held. Its central bank's decision is due at 5:30 p.m. (2130 GMT)

Markets see a 50-basis-point rate hike on the horizon, poised to elevate the benchmark Selic interest rate to 14.75%—a peak not seen in nearly two decades.

Sao Paulo's benchmark stock index .BVSP fell 0.43%.

The real has been the worst performer in the region year-to-date, as the central bank grapples with an economy running hot as inflation had surged to 5.49% in the twelve months leading to mid-April, marking its swiftest pace in over two years.

Economists surveyed by Brazil's central bank foresaw monetary policy easing only at the tail end of 2025.

Meanwhile, fresh data indicated a 1.2% rise in Brazil's industrial production in March compared to February.

"Brazil's central bank is in the final stage of monetary policy tightening and may deliver the last 50 bp hike of the cycle.. as the bank contemplates the challenging external environment due to U.S. tariffs, tightening domestic financial conditions and a stronger real," analysts at Societe Generale said.

Mexico's local bourse .MXX climbed 0.41%, with the peso MXN= also advancing 0.34%. The optimism was buoyed by a "productive' meeting" between Mexican economy chief Marcelo Ebrard and senior U.S. officials late on Tuesday.

Analysts have lauded President Claudia Sheinbaum's strategic negotiations aimed at reducing tariffs with Mexico's largest trading partner.

The Mexican central bank's Deputy Governor Jonathan Heath said in a podcast with lender Banorte that there was still room to lower interest rates and added that it was highly likely that the loosening cycle would continue.

As Mexico gears up for its April inflation figures release on Thursday and an impending central bank decision on interest rates next week, investors are also keeping a keen eye on tariff discussions, particularly with the U.S.-China trade policy developments absorbing much of their attention.

Optimism that the world's two biggest economies will work together to de-escalate damaging tariffs has stoked global risk appetite recently.

The Fed's rate decision is due later in the day, where investors expect the central bank to stand pat on borrowing costs.

In Chile, the world's largest producer of copper, data showed the country exported $4.52 billion of the red metal in April, up 8.2% from a year earlier.

The nation's peso CLP= slipped 0.69%, in tandem with copper prices. MET/L

Elsewhere, Romania's leu EURRON= found itself in uncharted territory, hitting a fresh record low for the second consecutive day.

Romania's central bank said on Tuesday it was searching for the "optimal way" to counter significant capital outflows, as the leu faced steep declines following a hard-right opposition leader's victory in the first round of a repeat presidential election.

In Asia, India's rupee INR= witnessed its steepest intraday fall in nearly a month. The decline followed Indian military strikes in Pakistan and Pakistani Kashmir, a response to the April killings of tourists that escalated tensions between these nuclear-armed neighbors to levels unseen in over twenty years.

Key Latin American stock indexes and currencies: