EMERGING MARKETS-Dollar retreat lifts Latam currencies

* Colombia stock exchange measures may allow it to stay in JPM index * IMF approves $8.1 bln flexible credit line for Colombia * Brazil's central government posts budget deficit in March * Latam stocks up 0.6%, currencies add 0.5% By Bansari Mayur Kamdar April 29 (Reuters) - Colombia's peso rose on Monday, tracking broader emerging market currencies as the dollar retreated further, while Latin American stocks gained at the start of a data-heavy week, including an interest rate decision by the U.S. Federal Reserve. The peso added 0.4% against a softer greenback, briefly touching its highest level in two weeks, and Colombian stocks climbed 1.0% outpacing most regional peers. The Colombian stock exchange's president said measures taken by the exchange and securities issuers to improve liquidity could be enough for the country to hold onto its "emerging market" classification and stay in a key JPMorgan index. The International Monetary Fund on Friday approved a flexible credit line worth $8.1 billion for Colombia, which will not use the loan immediately but could draw it down during a crisis. Investors awaited a rate decision by Colombia's central bank on Tuesday where it is expected to cut interest rates by 50 basis points for its second straight meeting. "Our base case is for BanRep to continue with rate cuts at upcoming meetings, as we expect inflation to fall over the next three to six months," said Andres Abadia, chief Latam economist at Pantheon Macroeconomics. All eyes will also be on the Fed's interest rate decision due Wednesday, ahead of a key jobs report on Friday that could set the tone for U.S. monetary policy. Overall, the MSCI index for Latin American currencies gained 0.5%, while the stocks index added 0.6%. Mexico's peso, Peru's sol and Chile's peso gained between 0.4% and 0.7%. Brazil's real lagged peers, and was little changed against the dollar. The Brazilian central government recorded an unexpected budget deficit in March, data showed, with increased expenses overshadowing the rise in revenues. The Bovespa index edged 0.2% higher, with Brazilian retailer Casas Bahia surging 19.7% on plans to restructure 4.1 billion reais ($801.36 million) in debt. In Argentina, stocks jumped 1.9% as the Chamber of Deputies begin discussing on Monday two packages of liberal reforms promoted by far-right president Javier Milei. Key Latin American stock indexes and currencies at 1454 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1050.71 0.88 MSCI LatAm 2477.30 0.58 Brazil Bovespa 126767.81 0.19 Mexico IPC 57953.52 0.21 Chile IPSA 6462.62 1.07 Argentina MerVal 1303856.95 1.907 Colombia COLCAP 1380.55 1.02 Currencies Latest Daily % change Brazil real 5.1165 -0.02 Mexico peso 17.0534 0.50 Chile peso 944 0.62 Colombia peso 3883.43 0.23 Peru sol 3.7301 0.13 Argentina peso (interbank) 876.0000 -0.11 Argentina peso (parallel) 1035 1.93 (Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Andrea Ricci)