(Updated at 1500 GMT)
* Lula backs spending cuts to meet Brazil's fiscal framework
* Chilean central bank releases June policy meeting minutes
* Kenya's president, IMF chief speak after tax hikes pulled
* Latin American stocks up 1.2%, currencies up 1%

By Johann M  Cherian
       July 4 (Reuters) - Brazil's real led gains among Latin
American currencies after President Luiz Inacio Lula da Silva
committed his government to fiscal stability, while markets also
reacted to the release of central bank policy meeting minutes in
Chile.    
    Brazil's real jumped 1.2% to 5.49 to the dollar after
Lula ordered his economic team to comply with the country's
fiscal framework and approved suggestions of spending cuts, the
country's finance minister said. 
    The currency jumped more than 2% on Wednesday, its biggest
one-day rise since January, in the run-up to the meeting between
the Brazilian leader and his economic team. The real recently
had a bout of losses that saw it depreciate to more than
two-year lows on concerns of fiscal sustainability in the
region's biggest economy.
    "Superficially, you can see a small (improvement) after all
the damage he's done recently ... but there is a possibility
that he might change his mind at some point and that is going to
stay in the back of investors minds for a while," said Eduardo
Ordonez Bueso, an emerging markets debt portfolio manager at
BankInvest.
    More broadly, the MSCI index that tracks Latin American
currencies strengthened 1% to more than a
one-week high against the dollar. Trading was expected to be
thin as U.S. markets were closed due to the Independence Day
holiday.
    Markets are turning their focus to the release on Friday of
the U.S. government's closely-watched monthly employment report,
which could provide clues to the Federal Reserve's likely
monetary policy path and the outlook for the dollar. 
    Mexico's peso added 0.7%, with market participants
awaiting more announcements on the formation of President-elect
Claudia Sheinbaum's cabinet. 
    Traders also parsed Sheinbaum's latest criticism of the
Mexican judiciary. Concerns about judicial independence under
Sheinbaum's incoming government have pushed the currency to
notch its biggest quarterly drop since the COVID-19 pandemic.
    Chile's peso inched up 0.3% as copper prices were
steady. The South American nation is the world's largest
producer of the metal. 
    Minutes from the Chilean central bank's policy meeting last
month showed it considered cutting the benchmark interest rate
by 50 basis points or keeping it unchanged. The central bank
opted for a 25-basis-point reduction to 5.75% at the meeting.
    Peru's sol climbed 0.7% in thin trading. Economy
Minister Jose Arista said the copper exporter's economy likely
grew between 4.5% and 5% on a year-on-year basis in May, in what
would be the second consecutive month of growth.
    Colombia's peso added 0.4%.
    The MSCI index that tracks regional bourses
rose 1.2% to a one-month high, aided mostly by heavy-weight
Brazilian equities.
    The main stock indexes in Mexico, Colombia
and Chile were largely flat to marginally higher.     
  
    Elsewhere, the yield on Kenya's five-year bond
slipped 13 basis points.
    According to sources, Kenyan President William Ruto spoke
with International Monetary Fund chief Kristalina Georgieva
after he withdrew proposed tax hikes after deadly protests. The
hikes were central to the IMF's $3.6 billion lending programme
for the East African nation.
    
    Key Latin American stock indexes and currencies:
    
 Latin American market prices from           
 Reuters                              
                                      
   Stock indexes            Latest    Daily %
                                      change
 MSCI Emerging Markets       1104.28     1.09
                                      
 MSCI LatAm                  2236.13     1.25
                                      
 Brazil Bovespa            126238.21     0.46
                                      
 Mexico IPC                 52836.27     0.08
                                      
 Chile IPSA                  6547.72      0.2
                                      
 Argentina MerVal         1608339.35    0.301
                                      
 Colombia COLCAP             1384.78     0.24
                                      
                                             
       Currencies           Latest    Daily %
                                      change
 Brazil real                  5.4908     1.40
                                      
 Mexico peso                 18.0586     0.56
                                      
 Chile peso                    936.6     0.62
                                      
 Colombia peso                4086.5     0.44
 Peru sol                      3.791    -0.05
                                      
 Argentina peso             913.5000     0.11
 (interbank)                          
                                      
 Argentina peso                 1375     2.18
 (parallel)                           
                                      
 
 (Reporting by Johann M Cherian in Bengaluru; Editing by Paul
Simao)