* Brazil's Treasury Secretary Mansueto Almeida quits * Brazil's real falls more than 3% before retracing some losses * Chilean peso outperforms; govt announces $12 bln stimulus * Argentina extends debt talks deadline to June 19 By Susan Mathew June 15 (Reuters) - Brazil's real slumped more than 3% on Monday as political uncertainty intensified after the resignation of the country's treasury secretary, while Latin American stocks fell on concerns of a slower economic recovery. Sentiment took a hit as Beijing implemented fresh curbs after a surge in the number of COVID-19 cases while cases in the United States continued to surge, signaling the global economy could be in a prolonged state of economic distress. Downbeat factory activity from China was the latest evidence. But regional stocks lifted off session lows as Wall Street recovered to trade higher after the U.S. Federal Reserve's decision to apply an indexing approach to its secondary market corporate credit facility boosted investor confidence. Brazil's real, among the worst performing emerging market currencies this year, fell more than 3% after Treasury Secretary Mansueto Almeida, a key architect of fiscal policy behind Economy Minister Paulo Guedes, said he would leave office in August. This follows a series of ministerial resignations from President Jair Bolsonaro's government since April, most of them over differences with the president, and comes at time when the novel coronavirus pandemic is roiling the nation. "If his departure represents a change in the government's economic policy, the risk of fiscal indiscipline may return and worsen the 'Brazil risk' and outlook for long-term interest rates," said Rafaela Vitoria, chief economist at Banco Inter in Belo Horizonte. Sources told Reuters that Bruno Funchal, an official at Brazil's Economy Ministry, is set to be named as Almeida's successor. "Funchal is a good name for replacement indeed," said Wilson Ferrarezi, an economist at TS Lombard, pointing to Funchal's fiscal discipline demonstrated during his time as trade secretary of Brazilian state Espírito Santo. "This is likely to help cushion the negative effects of Almeida's resignation, but the market does have a very high bar." The real last traded 2% lower at 5.1466 to the dollar, while Sao Paulo-listed stocks fell 0.2%. Chile's currency surged more than 1% despite falling prices of its main export item, copper. The government over the weekend announced a fresh, two-year, $12 billion citizen support and economic stimulus package to overcome the effects of the coronavirus outbreak. But as the number of COVID-19 cases surged, Chile´s government said it would extend the existing state of catastrophe for 90 days. Mexico's peso cut losses to trade flat, while stocks lost 0.7%. Argentine and Colombian markets were closed for a holiday. The Argentine government on Friday extended the deadline to restructure around $65 billion in sovereign debt to at least June 19. Key Latin American stock indexes and currencies at 1939 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 969.01 -1.82 MSCI LatAm 1934.10 -1.29 Brazil Bovespa 92614.93 -0.19 Mexico IPC 37467.07 -0.56 Chile IPSA 3927.27 -1.37 Currencies Latest Daily % change Brazil real 5.1466 -2.00 Mexico peso 22.2310 -0.05 Chile peso 786.4 0.90 Peru sol 3.4778 -0.38 (Reporting by Susan Mathew in Bengaluru; additional reporting by Jamie McGeever in Brasilia; editing by Jonathan Oatis)
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