EMERGING MARKETS-Dollar retreat lifts Latam currencies at start of data-heavy week

* Colombia stock exchange measures may allow it to stay in JPM index * IMF approves $8.1 bln flexible credit line for Colombia, approves $1.1 bln funding for Pakistan * Brazil's central government posts budget deficit in March * Latam stocks up 0.9%, currencies add 0.5% (Updated at 3:45pm ET/1945 GMT) By Bansari Mayur Kamdar April 29 (Reuters) - Latin American currencies tracked broader emerging market currencies higher on Monday as the dollar weakened and stocks in the region rose at the start of a data-heavy week. The dollar softened 0.3% as investors eyed a busy week with an interest rate decision by the Federal Reserve on Wednesday and closely watched U.S. payrolls data due on Friday. The Colombian peso rose 0.9% against the greenback, briefly touching its highest level in two weeks, and Colombian stocks climbed 1%. Investors expect Colombia's central bank to cut interest rates on Tuesday by 50 basis points at its second meeting in a row. "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. 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. The MSCI index for Latin American currencies gained 0.5%, while the stocks index added 0.9%. Mexico's peso, Peru's sol and Chile's peso gained between 0.4% and 1%. Brazil's real lagged peers, 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. Brazil's Bovespa index gained 0.5%. Shares of Casas Bahia soared 32%, their biggest rally in 10 years, after the Brazilian retailer announced an agreement to restructure 4.1 billion reais ($801.45 million) in debt. In Argentina, stocks jumped over 2% 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 1945 GMT: Latest Daily % change MSCI Emerging Markets 1051.83 0.99 MSCI LatAm 2485.47 0.91 Brazil Bovespa 127120.36 0.47 Mexico IPC 57659.83 -0.3 Chile IPSA 6527.01 2.08 Argentina MerVal 1306712.27 2.13 Colombia COLCAP 1380.88 1.04 Currencies Latest Daily % change Brazil real 5.1145 0.02 Mexico peso 17.0180 0.71 Chile peso 940.9 0.96 Colombia peso 3856.71 0.92 Peru sol 3.7183 0.45 Argentina peso 876.5000 -0.17 (interbank) Argentina peso 1025 2.93 (parallel) (Reporting by Bansari Mayur Kamdar and Lisa Mattackal in Bengaluru; Editing by Andrea Ricci and Richard Chang)