Latin American currencies firmed against a dented dollar on Monday, with Colombia's peso hitting six-week highs ahead of a central bank meeting later in the day.

The peso led gains in the region, up 0.6%. The bank is not seen discussing rates at this meeting, Citi Strategists said, adding that they will be looking for talks around the International Monetary Fund's special drawing rights, which corresponds to around $2.8 billion for Colombia.

"While the government has expressed willingness to use the funds for fiscal purposes, their use will depend on the board's decision..."

Meanwhile, recent finance minister Alberto Carrasquilla, who resigned earlier this year after a botched tax reform proposal, was appointed to Colombia's central bank board. Citi does not expect this change to "greatly alter the board's voting balance."

Latam FX range bound on caution ahead of Powell speech

The currency is up almost 2% this month after losing more than 4% over the last two months.

Other Latam currencies followed broader emerging market peers into the black as US Federal Reserve Chair Jerome Powell's dovish stance at the Jackson Hole symposium kept risk appetite buoyed, denting the dollar.

Mexico's peso firmed 0.5%, while Chile's peso was set for its best session in almost three weeks as copper prices rose on the Shanghai exchange.

Brazil's real was little changed, while Sao Paulo listed stocks fell sharply after posting their best week in 12 on Friday. Financial and industrial stocks led losses.

Bourses elsewhere in Latam made healthy gains, putting MSCI's index of Latam shares in positive territory.

In Peru, the sol slipped slightly after the Congress on Friday confirmed a new leftist Cabinet nominated by President Pedro Castillo, allowing the fledging administration to continue an agenda focused on higher social spending coupled with higher taxes for the mining industry.