* Brazil's economic activity loses steam in Q2 with 0.43% growth * Chile central bank could consider 75bp, 100bp interest rate cuts * Argentina markets slide after far-right win in primary vote * Latam stocks down 1.9%, FX off 1.1% By Bansari Mayur Kamdar Aug 14 (Reuters) - Argentina's peso and stock market fell on Monday after a far-right libertarian who wants to axe the central bank and dollarize the economy unexpectedly won a primary election, while other Latin American currencies also weakened as worries mounted over China's economic recovery. The interbank Argentine peso fell 17.89% to 349.95 per dollar, while stocks slid 3.5% after radical far-right economist Javier Milei unexpectedly won the country's primary vote over the weekend. Argentina's sovereign dollar bonds fell as much as 2.25 cents on the dollar, with the 2038 note leading the decline, according to MarketAxess data. "The surprisingly strong showing for far-right self-proclaimed 'anarcho-capitalist' Javier Milei...suggests that there is popular appetite for a shock-therapy style approach to deal with the economy’s problems," said Kimberley Sperrfechter, emerging markets economist at Capital Economics. "But the left-wing ruling Peronists still have a fighting chance, which may lead to a further build-up of economic vulnerabilities in the run-up to the presidential vote in October." Meanwhile, Argentina's central bank will raise the benchmark interest rate to 118% from 97% previously, said an official source. Overall, the MSCI index for Latin American currencies was 1.1% lower, while regional stocks fell 1.9%. The U.S. dollar hit a one-month high against a basket of other major currencies as investors sought a safe haven on concerns about China's economy, and was last up 0.3%. Brazil's real and stocks eased 0.9% each. Data showed Bazil's economic activity lost momentum in the second quarter, after an upbeat start to the year driven by a robust performance in the agriculture sector. Oil exporters Mexico and Colombia's currencies fell 0.3% and 1.1%, respectively, against the dollar, as crude prices weakened on demand worries after China's disappointing credit data added to concerns about its slowing economy. No.1 copper producer Chile's peso eased 0.5% against the greenback. Chile's central bank could consider interest rate cuts of around 75 to 100 basis points at its next meetings, minutes from the board's July meeting showed. Peru's sol slipped 0.2% against the dollar. Elsewhere in emerging markets, Russia's rouble slid past 101 per U.S. dollar, before rebounding to below 100 after the central bank announced an extraordinary policy meeting for Tuesday. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 985.15 -1.26 MSCI LatAm 2380.34 -1.87 Brazil Bovespa 116952.11 -0.94 Mexico IPC 53117.73 -0.23 Chile IPSA 6213.44 -0.7 Argentina MerVal 464265.89 -3.329 Colombia COLCAP 1147.87 0.03 Currencies Latest Daily % change Brazil real 4.9504 -0.94 Mexico peso 17.0722 -0.49 Chile peso 864.7 -0.95 Colombia peso 4005.88 -0.83 Peru sol 3.705 -0.86 Argentina peso 349.9500 -17.89 (interbank) Argentina peso 660 -8.33 (parallel) (Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Kirsten Donovan)
