By Pranav Kashyap

March 12 (Reuters) - Most Latin American currencies and stocks dropped on Thursday as investors continued to wrestle with the inflationary fallout of the Iran war, while Chile adjusted to a major political shift following its presidential election.

A gauge tracking regional equities .MILA00000PUS slumped 3.1%, while a similar index for Latin American currencies .MILA00000CUS slipped 1%.

Jittery investors sought shelter in the liquidity of the U.S. dollar, shying away from currencies in countries seen as especially exposed to oil-price shocks.

Across emerging markets, policymakers have spent recent days scrambling to navigate violent swings in crude prices. India has invoked emergency measures to tackle supply shortages, Poland has turned to financial tools to soften the blow, and Brazil is preparing to announce measures aimed at cushioning the impact of higher diesel prices.

In Brazil, separate data showed consumer prices rose 0.7% in February, topping market forecasts and clouding the outlook for the central bank just as investors had been betting on a rate cut next week.

The real BRL= slipped 0.9%, while stocks .BVSP fell 2.2%, though both remained on track for modest weekly gains.

"The data keeps an interest rate cut in play at next week's meeting. Much will depend on developments in the Middle East over the coming days and as things currently stand, we think it's slightly more likely that the central bank opts for a 50bp rate cut." said Liam Peach, senior emerging markets economist at Capital Economics.

Meanwhile, Chilean assets also came under pressure. The peso CLP= was down 1.5%, stocks in Santiago .SPIPSA dropped 1.7%, and yields on the country's 10-year bond CL10YT=RR hovered near their highest levels since November.

Jose Antonio Kast was sworn in as Chile's president on Wednesday, marking the country's sharpest shift to the right in decades. He has pledged to lift economic growth through deregulation, spending cuts and market-friendly policies.

In Colombia, an improved 2026 fiscal deficit target from the finance ministry - aimed at a smaller share of gross domestic product than previously planned - did little to stir local markets, which remained caught in the grip of a broader global risk-off mood.

Stocks in Bogota .COLCAP fell 2.3%, while the peso COP= weakened 0.2%.

The U.S.-Israeli war on Iran entered its 13th day with no sign of easing. Iran's new Supreme Leader, Mojtaba Khamenei, said the country would avenge the blood of its martyrs, keep the Strait of Hormuz closed and target U.S. bases.

Tehran had already warned the world to brace for oil at $200 a barrel after striking tankers in Iraqi waters and other ships near the strategically vital waterway.

Oil's jump above the $100-a-barrel mark revived a familiar fear that has stalked markets since the Middle East conflict began: a fresh energy shock. For import-dependent economies, that rise threatens to spill quickly into broader inflation pressures, complicating central banks' efforts to loosen policy.

Turkey, Iran's neighbor, underscored those concerns when it halted its easing cycle once again and left its key interest rate unchanged at 37%, citing the inflation risks stemming from the war's market fallout.

Stocks in Istanbul .XU100 rose 0.3%, while the lira TRY= slipped 0.1%.

Key Latin American stock indexes and currencies:

(Reporting by Pranav Kashyap in BengaluruEditing by Nick Zieminski)

((pranav.kashyap@tr.com; +919886482111;))