*
      US Fed holds rates, slows balance sheet drawdown


        *
      Brazil rate verdict awaited, expected to hike


        *
      Turkish lira hits record low, local stocks plunge


        *
      Latam FX up 0.2%, stocks climb 1%



 (Updates with mid-session trading)
    By Shashwat Chauhan and Purvi Agarwal
       March 19 (Reuters) - Latin American currencies were
mixed on Wednesday after the U.S. Federal Reserve left interest
rates unchanged and projected two cuts this year, while Turkish
assets took a hit after authorities detained President Tayyip
Erdogan's main political rival.
    The Fed held interest rates steady but the central bank's
policymakers indicated they still anticipate reducing rates by
half a percentage point by end-2025 in the context of slowing
economic growth and eventually, a downturn in inflation.
        "The Fed remains in no hurry to cut interest rates, but
President Trump's spending cuts and trade protectionist policies
are hurting growth prospects and will likely force the central
bank's hand later in the year," said James Knightley, chief
international economist at ING.

        The dollar was 0.2% higher, pressuring some Latin
American currencies such as the Mexican peso and
Colombia's peso that fell 0.8% each.

    Turkish assets were hit hard after authorities detained
Istanbul mayor Ekrem Imamoglu, the main rival of President
Tayyip Erdogan, on charges of corruption and aiding a terrorist
group in what the main opposition party called "a coup against
our next president".
    The lira plunged as much as 12.7% earlier in the
day to a record low of 42 per dollar, marking its worst day
since June 2023. Local stocks closed 8.7% lower while
its international bonds also saw heavy selling pressure.
    Turkish Finance Minister Mehmet Simsek said that everything
necessary is being done to ensure the markets are functioning
healthily after the slide, without giving any further details.
    The central bank sold a record amount of foreign currency on
Wednesday, according to calculations by three bankers.
    "There were very strong signs that Turkish assets would be
giving positive real interest rates, but now there is currency
volatility," said Emre Akcakmak, head of frontier markets and
portfolio adviser with East Capital Group, also pointing that an
interest rate cut was potentially off the table now.
        "Foreign investors will likely be discouraged by all
these uncertainties."

    The central bank cut rates for the first time in December
after an 18-month tightening effort that had reversed years of
unorthodox policy and easy money backed by Erdogan.
    Back in LatAm, Brazil's real firmed 0.4% ahead of a
local interest rate decision later in the day, when it is widely
expected to hike rates to bring the Selic rate to 14.25%.
    Brazil's government kept its economic growth forecast for
this year unchanged at 2.3%, while slightly increasing its
inflation estimate.
    Chile's peso held firm at 916.35 per dollar, with an
interest rate decision expected on Friday.
    MSCI's index for Latin American currencies
was slightly higher, while the stocks gauge
gained 1%, trading at its highest since early November.
    Heavyweight Brazil added 0.8%, while Mexican stocks
 were up 0.5%. Argentina's Merval jumped 3.7%, as
the country's IMF deal faced a key vote in the local Congress.
    Elsewhere, Ukraine's international bonds and the Russian
rouble fell after Russian President Vladimir Putin agreed
on Tuesday to stop attacking Ukrainian energy facilities
temporarily but declined to endorse a full 30-day ceasefire.
    U.S. President Donald Trump and Ukrainian President
Volodymyr Zelenskiy agreed to work together to end Russia's war
with Ukraine, in what the White House described as a "fantastic"
one-hour phone call.




        Highlights:

        **
    Argentina's 2024 economy shrinks 1.7% despite late-year
rebound

    ** Panama's economic growth slows to 2.9% in 2024 after key
mine closure


    Key Latin American stock indexes and currencies around 1950
GMT:









 MSCI Emerging Markets         1143.29      -0.16

 MSCI LatAm                    2151.82       0.95
 Brazil Bovespa              132494.78       0.78
 Mexico IPC                   53027.83       0.48
 Chile IPSA                    7594.95       0.12
 Argentina Merval            2372939.9       3.69
                                     7
 Colombia COLCAP               1623.55       0.01








 Brazil real                    5.6461       0.43
 Mexico peso                   20.0516      -0.75
 Chile peso                     916.35       0.04
 Colombia peso                  4148.5      -0.77
 Peru sol                        3.619       0.14
 Argentina peso (interbank)    1068.75      -0.02

 Argentina peso (parallel)        1260       1.98




 (Reporting by Shashwat Chauhan, Purvi Agarwal and Libby George;
Editing by Alexandra Hudson and Franklin Paul)