EMERGING MARKETS-Brazil’s real leads Latam FX lower; China measure boosts stocks

* China halves stamp duty on stock trades * Brazil bank lending delinquency rises again in July * Brazil seeks balanced taxation on closed-end funds, offshore * Argentina’s new policy package to boost reserves, strengthen fiscal order -IMF By Ankika Biswas Aug 28 (Reuters) – Brazil’s real declined in a lackluster session for Latin American currencies against a steady dollar on Monday while regional stocks edged higher on China’s latest measure to boost its markets. The Brazilian real fell 0.4%, partly reversing last week’s 2% rise. Data showed Brazil’s July non-earmarked credit default rate rose to 5%, its highest since January 2018, despite a minor decrease in bank lending rates and a government-initiated debt renegotiation incentive program. “We expect credit conditions to be exigent in coming months given the high level of consumer indebtedness, high rates, softening outlook for real activity, and several corporate credit distress situations,” Goldman Sachs analysts said in a note. Central bank Governor Roberto Campos Neto said “time will tell” how important it is to have an autonomous monetary authority, responding to recent criticism from President Luiz Inacio Lula da Silva, who has repeatedly pressed for lower interest rates. Private sector economists expect Brazil’s gross domestic product to grow 2.31% this year, slightly up from the previous week’s forecast of 2.29%. Meanwhile, Brazil’s government is looking to tax closed-end and offshore funds as part of much-needed tax recovery, and has already opened dialogue with the lower house and the Senate, a senior Finance Ministry official said on Friday. Chile’s peso eased 0.4%, after gaining 3% last week. Traders are anticipating a 75-basis-point interest rate cut at next week’s monetary policy meeting, after policy easing kicked off in July with a larger-than-expected 100-bp cut. Peru’s sol slipped 0.3% and Colombia’s peso was also slightly lower against the dollar. The dollar index was 0.038% lower after hitting a 12-week high on Friday as traders weighed U.S. and European central bankers’ monetary options after last week’s Jackson Hole meeting, where Federal Reserve Chair Jerome Powell indicated the need to lift rates further. The IMF said Argentina’s new policy package should boost net international reserves by some $8 billion between August and December, though that would still leave it $7 billion below a previous end-2023 target. The comment came after the approval of a $7.5 billion disbursement after Argentina completed the fifth and sixth reviews for the country’s $44 billion program. “We expect the IMF and the next government will need to holistically review the program as part of a more comprehensive macroeconomic program that puts the economy on a structurally more sustainable trajectory,” Goldman Sachs analysts said. “The agreed measures are insufficient to rebalance the economy in a meaningful and lasting way.” The MSCI stocks gauge gained 0.6%, tracking broader emerging market shares after China halved the stamp duty on stock trading effective Monday – the latest attempt to boost its struggling market amid a sputtering economic recovery. Key Latin American stock indexes and currencies at 1430 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 977.09 0.62 MSCI LatAm 2397.11 0.62 Brazil Bovespa 116149.77 0.27 Mexico IPC 53586.42 0.74 Chile IPSA 6067.79 0.32 Argentina MerVal 0.00 0 Colombia COLCAP 1111.07 0.86 Currencies Latest Daily % change Brazil real 4.8922 -0.37 Mexico peso 16.7235 0.00 Chile peso 847.1 -0.35 Colombia peso 4120.73 -0.03 Peru sol 3.6912 -0.27 Argentina peso (interbank) 349.9500 0.03 Argentina peso (parallel) 720 0.69 (Reporting by Ankika Biswas in Bengaluru; Editing by Kirsten Donovan)