EMERGING MARKETS-LatAm assets slide; Chile to auction dollars

* LatAm stocks, currencies slide on Wall Street sell-off
* Chile to auction up to $3 bln to support peso
* Mexico sells dollars to banks for 2nd consecutive session
* Trading volumes low as Brazil shut down for Carnival

NEW YORK, Feb 23 (Reuters) - Latin American financial
markets posted losses on Monday as persistent bank fears caused
Wall Street to sink to 12-year lows, but trading volumes were
low with Brazil shut down for Carnival.

The Mexican peso closed at a record low of nearly 15.0 per
dollar while the Chilean peso closed lower for the sixth
consecutive session, prompting central banks in both countries
to act to support their currencies.

"The whole world is taking refuge in the dollar," said Raul
Garduno, head of Interacciones brokerage in Mexico City.

The Mexican peso weakened 0.82 percent to 14.9225 per
dollar at the central bank's final 1:30 p.m. (1930 GMT)
reference, its weakest official close since new pesos were
introduced in 1993.

Last week Mexico's central bank decided not to cut interest
rates as deeply as expected, citing concerns that the recent
deterioration of the peso could lead to higher consumer
prices.

"They don't want to let the peso go, which would have been
the adjustment value, because yes, they do not have the fiscal
maneuverability," said one U.S.-based currency strategist.

"So now they are in a situation where the market is going
to challenge their statement that they are worried about the
peso. It was a mistake to be honest," the strategist added.

The Chilean peso CLP=CL closed 0.24 percent weaker at
624.50 per dollar. Traders expect it to rebound on Tuesday
after the central bank announced late in the day it will
support the currency by auctioning $50 million per session as
of March, up to a total of $3 billion.

The auctions, funded by Chile's $20 billion sovereign
wealth fund, will provide the government with the pesos it
needs to implement part of its $4 billion fiscal stimulus
package. For details, see [ID:nN23346031].

In equity markets, the MSCI index for Latin America closed
0.48 percent lower, in a subdued session due to the absence of
trading in major Brazilian stocks.

Mexico's benchmark IPC index .MXX, however, ended 2.01
percent lower to near four-month lows. Argentina's MerVal
.MERV plunged 3.73 percent.

Yield spreads between emerging-market bonds and U.S.
Treasuries, a key gauge of risk aversion, widened 6 basis
points to 668 basis points according to JPMorgan's EMBI+ index
11EMJ.
(Reporting by Walter Brandimarte and Daniel Bases in new York,
Michael O'Boyle in Mexico City; Editing by Leslie Adler)
Latin American market prices from Reuters
Stock indexes Latest % change
----------------------------------------------------------
MSCI LatAm .MILA00000PUS 1,970.64 -0.48
Mexico IPC .MXX 17,956.40 -2.01
Chile IPSA .IPSA 2,542.48 -1.89
Chile IGPA .IGPA 12,168.13 -1.48
Argentina MerVal .MERV 1,009.51 -3.73
Colombia IGBC .IGBC 7,580.73 0.00
Peru IGRA .IGRA 6,560.80 -1.19
Currencies Latest Local forex

% change
----------------------------------------------------------
Mexico peso MXN= 14.9650 -1.10
Argentina peso* ARSB= 3.6525 -0.75
Chile peso CLP=CL 624.5000 -0.24
Colombia peso COP=RR 2,584.9000 -0.11
Peru sol PEN=PE 3.2500 -0.03
* Argentine peso's rate between brokerages
Global sovereign bonds Bid price Bid change
----------------------------------------------------------
Brazil 2040 BRAGLB40=RR 122.750 -0.438
Mexico 2017 MEXGLB17=RR 94.938 -0.250
Argentina Disc ARGGLB33=RR 27.375 0.875
Venezuela 2027 VENGLB27=RR 53.688 0.875
Ecuador 2030 ECUGLB30=RR 29.813 0.125
Sovereign CDS-5 years Latest % pt change
----------------------------------------------------------
Brazil BRGV5YUSAC=MG 401.170 11.144
Mexico MXGV5YUSAC=MG 457.670 27.207
Argentina ARGV5YUSAC=MG 3,128.810 36.185
Venezuela VEGV5YUSAC=MG 2,477.500 31.962