* Venezuela rejects auction process that could lead to Citgo breakup * IMF in touch with Argentina presidential candidates -source * Latam FX up 0.2%, stocks add 0.8% By Bansari Mayur Kamdar Aug 16 (Reuters) - Most currencies in Latin America rose against the dollar on Wednesday, but Argentina's peso fell to a fresh historic low in the black market and the South American nation's stocks hit an all-time high amid growing political and economic uncertainty. The Argentine peso weakened to 765 per dollar in the popular parallel market, more than double the official rate of 350 fixed by the central bank on Monday until the October general elections. It was the third straight day of losses for the peso after far-right libertarian economist Javier Milei unexpectedly won a primary election over the weekend. The International Monetary Fund (IMF) reached out to the camps of Argentina presidential candidates Milei and Patricia Bullrich to coordinate meetings, a source close to the fund said on Tuesday. "Overall, following a 22% devaluation of the official exchange rate after the PASO election, we expect inflation expectations to drift further up in August and remain unanchored despite a broad set of controls across the economy," said Goldman Sachs' Sergio Armella in a note. "Weak policy credibility, a misaligned real exchange rate, critically low levels of international reserves, and elevated uncertainty are significant drivers of macroeconomic pressures." Argentina's leading stock index S&P Merval, often used as a hedge against inflation, hit a record high and was last up 4.7%. Broadly, stocks in Latin America gained 0.8%, outpacing the 0.6% slide in broader emerging market shares after Chinese stocks fell on fears of a sharper economic downturn. The MSCI's index for Latin American currencies added 0.2%, outpacing the 0.1% slip in the broader emerging market currencies index. Leading regional gains, the Chilean peso rose 1.0% against a weaker dollar, while Peru's sol advanced 0.7%. Oil exporter Mexico's peso gained 0.5% against the greenback, tracking firmer crude prices. With less than a month until the ruling party's presidential candidate is announced, former Mexico City Mayor Claudia Sheinbaum has grown her lead to a 13-point advantage, a poll published on Wednesday in newspaper El Universal showed. The Brazilian real edged 0.2% up against the dollar. Brazil's average core inflation has been falling but it is still well above what policymakers would like, said central bank governor Roberto Campos Neto, reaffirming that the fight against inflation has not been won. Colombia's peso was on track for its fourth straight session of losses, last down 0.5%. Negotiators and officials representing Venezuela are opposing a court-ordered auction of shares in a parent of oil refiner Citgo Petroleum to pay creditors claiming more than $10 billion from expropriations and debt defaults. Elsewhere, Russia's rouble strengthened, one day after the central bank hiked interest rates to 12% at an emergency meeting and amid speculation over what other steps Russia may take to prop up its struggling currency. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 975.57 -0.63 MSCI LatAm 2381.75 0.83 Brazil Bovespa 117046.93 0.75 Mexico IPC 53919.26 0.66 Chile IPSA 6173.16 -0.72 Argentina MerVal 552318.49 4.756 Colombia COLCAP 1138.37 0.73 Currencies Latest Daily % change Brazil real 4.9803 0.13 Mexico peso 17.0628 0.45 Chile peso 853.7 0.00 Colombia peso 4113.26 -0.46 Peru sol 3.7063 -0.32 Argentina peso 349.9500 0.01 (interbank) Argentina peso 765 -4.58 (parallel) (Reporting by Bansari Mayur Kamdar in Bengaluru, editing by Deepa Babington)
