* Brazil lifts 2025 inflation projections to 4%
* Brazil's Suzano up on dropping plan to buy International
Paper
* Bank of Mexico holds key interest rate at 11%
* Rand drops on reported discord over cabinet posts
* FX off 0.4%, stocks up 0.1%

By Johann M  Cherian and Shristi  Achar A
       June 27 (Reuters) - 
    Most Latin American currencies slipped on Thursday, with the
Mexican peso falling for the third session, after its central
bank left the key interest rate unchanged but acknowledged
progress on the inflation front. 
  
    Mexico's peso lost 0.4% as the Bank of Mexico
(Banxico) held its benchmark interest rate steady at 11.00% in a
split decision, and said it expects the country's disinflation
process to continue. 
    "They're essentially not placing too much weight on the
potential for inflationary pressures as a result of the
weakening of the Mexican peso post-election," said Christian
Lawrence, senior market strategist, LatAm FX at Rabobank.
        "That is interesting because it certainly tilts the
balance towards rate cuts definitely still coming this year."
  
        Investors also digested the four cabinet appointments in
President-elect Claudia Sheinbaum's government, including a pair
of former Mexico City officials to be her ministers for energy
and transportation. 
     The peso had depreciated significantly and is down over 7%
year-to-date following her landslide win earlier in the month.
    MSCI's index tracking Latam currencies
slipped 0.4%, with Brazil's real edging up 0.2%, hovering
near levels last seen in January 2022 it hit in the previous
session.
    Brazil's local central bank upped its 2025 inflation
forecasts to 4%, citing stronger-than-expected activity which
led it to halt interest rate cuts earlier this month. The
regulator has a continuous inflation target of 3%.
    Separately, Brazilian central bank chief Roberto Campos Neto
said that a rate hike is not the bank's baseline scenario, and
policymakers have intentionally chosen not to provide any
guidance at this time.
    Currency of copper producers, Chile and Peru
weakened as prices of the red-metal hit their weakest in more
than two months.
    On the equities front, MSCI's index tracking Latin American
stocks edged 0.1% higher. 
    Brazil's heavyweight Bovespa index climbed 1.2%,
with Suzano jumping nearly 13% after the pulpmaker
said it has terminated talks to buy International Paper.
    Petrobras climbed 1.9% after brokerage Bank of
America upgraded the oil firm to "buy."
    Equatorial advanced 6.3% after the power company
was the only bidder for holding a 15% stake in water utility
Sabesp, which is currently under a privatization
process.
    Elsewhere, Bolivia's boliviano edged up 0.1% in thin
trades after an attempted coup was thwarted.
    South Africa's rand depreciated over 1% on reports of
major disagreements over cabinet posts.
    Kenya's shilling slipped as civil unrest continued
even after the president bowed to pressure to withdraw a tax
hike bill. 
            
    Key Latin American stock indexes and currencies:
    
                                       Latest    Daily %
                                                  change
 MSCI Emerging Markets                  1081.92     -0.39
 MSCI LatAm                             2183.84      0.09
 Brazil Bovespa                       124110.58       1.2
 Mexico IPC                            52197.06     -0.52
 Chile IPSA                             6492.32     -0.31
 Argentina MerVal                    1627853.66      3.39
 Colombia COLCAP                        1377.35      0.62
                                                         
            Currencies                 Latest    Daily %
                                                  change
 Brazil real                             5.5049      0.24
 Mexico peso                            18.4058     -0.44
 Chile peso                               954.9     -0.44
 Colombia peso                           4170.5     -0.62
 Peru sol                                3.8199     -0.04
 Argentina peso (interbank)            910.5000      0.16
                                                 
 
 (Reporting by Johann M Cherian in Bengaluru; Editing by
Alistair Bell and Diane Craft)