* Brazil’s federal tax revenue falls in July, worst drop this year * Brazil’s Lula in favor of Argentina joining BRICS bloc * Mexico says it won’t modify decree on GM corn ahead of USMCA panel * Latam FX up 0.8% (Updated at 1955 GMT) By Bansari Mayur Kamdar and Ankika Biswas Aug 22 (Reuters) – Brazil’s real jumped against the dollar on Tuesday as BRICS leaders kicked off a summit in Johannesburg, with Brazilian President Luiz Inacio Lula da Silva saying he is in favor of embattled neighbor Argentina joining the bloc. The real appreciated 0.9% against the U.S. dollar, steering a 0.8% advance in the MSCI Latam currencies index . Finance Minister Fernando Haddad said a tax reform that will restructure Brazil’s complex consumption taxes – a key step in Lula’s plan to boost economic growth – will be finalised this year. Brazil’s federal tax revenue experienced in July its biggest monthly decline this year, underscoring challenges for the government seeking to improve public accounts. Central bank governor Roberto Campos Neto and monetary policy director Gabriel Galipolo reiterated that Brazil’s battle against inflation has yet to be won. Stocks in Brazil rallied 1.2%, leading regional gains, but have largely lagged their peers so far this year with a 5.7% advance. While Brazilian stocks stand to benefit from positive U.S. developments, the boost could be partially offset by China’s weak economic developments, given it is the main market for Brazilian exports, said Alfredo Coutinho, director of Moody’s Analytics for Latin America. Leaders of the BRICS nations – Brazil, Russia, India, China and South Africa – met to plot the future course of the bloc but divisions re-emerged ahead of a critical debate over a potential expansion of the group intended to boost its global clout. Lula said he wanted Argentina to join the BRICS group of emerging countries, as its neighbor struggles with a lack of foreign reserves. Argentina’s peso strengthened to as much as 708-per-dollar in the black market intraday. Economy Minister Sergio Massa expects the International Monetary Fund board to approve the latest reviews of its huge loan program on Wednesday, unlocking $7.5 billion. Currencies of top copper producers Chile and Peru benefited from strong copper prices, up 0.2% and 0.1%, respectively. Chile’s peso has declined year-to-date, underperforming its major Latam peers, with the central bank delivering a 100-basis-point rate cut in July. “Investors wanted to go to Chile because the rate differential was still attractive, but were caught off guard by the 100-bps cut … and that has been exerting pressures on the peso,” Coutinho added. Mexico’s peso gained 0.6%. Mexico won’t make any further changes to a decree on genetically modified corn ahead of a dispute settlement panel requested by the United States through the USMCA trade pact, the economy minister said. Bucking the trend, Colombia’s peso slipped 0.2%, but was off the day’s lows. Key Latin American stock indexes and currencies at 1955 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 965.76 0.62 MSCI LatAm 2363.42 1.28 Brazil Bovespa 115780.20 1.18 Mexico IPC 53095.47 -0.03 Chile IPSA 6161.31 0.61 Argentina MerVal 587283.00 0.512 Colombia COLCAP 1117.78 -1.31 Currencies Latest Daily % change Brazil real 4.9321 0.92 Mexico peso 16.9270 0.55 Chile peso 868.3 0.18 Colombia peso 4114.98 -0.23 Peru sol 3.7119 0.06 Argentina peso (interbank) 349.9500 0.01 Argentina peso (parallel) 715 0.70 (Reporting by Bansari Mayur Kamdar and Ankika Biswas in Bengaluru; Editing by Alistair Bell and Deepa Babington)
