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Emerging market stocks eye fourth straight weekly decline
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Moody’s set to review Hungary’s rating on Friday
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Sri Lanka to unveil debt restructuring plan to creditors
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Egypt c.bank keeps interest rates steady in surprise move
By Amruta Khandekar and Anisha Sircar
Sep 23 (Reuters) – Most emerging market currencies were subdued against a strong dollar on Friday as investors digest hawkish signals from the U.S. Federal Reserve, while stocks hit a more than two-year low in because of nervousness around a global economic slowdown.
The MSCI Emerging Markets Equity Index fell 1% and headed for its fourth consecutive weekly decline, in a week dominated by central bank policy measures, including a hike in interest rates. interest of 75 basis points by the Fed.
The index is down 26% so far this year as aggressive policy tightening, geopolitical tensions and growing recession fears push investors into safer assets such as the US dollar.
Emerging stocks saw outflows of $2.5 billion this week, down from $1.7 billion last week, while bond outflows hit $2.6 billion from $1.5 billion last week, according to weekly data from JPMorgan citing EPFR Global.
“Everything is negative for emerging markets these days… In Europe, the question of a recession is on the table and the geopolitical situation is not improving – everything points to negative sentiment,” the strategist said. of ING Frantisek Taborsky.
Among emerging currencies, the South African rand lost 0.9%, erasing gains from the previous session when the country’s central bank raised rates by 75 basis points, as expected.
The Turkish lira also fell 0.4%, a day after its central bank announced a surprise rate cut of 100 basis points.
Most Central and Eastern European currencies were subdued against the euro, with the Romanian leu and the Hungarian forint depreciating by around 0.2% each. Moody’s is expected to issue a ratings review report on Hungary later in the session, with analysts expecting a downgrade.
“It’s about whether Hungary will have access to EU (European Union) money or not. Hungary will find some kind of agreement but it will take time,” Taborsky added.
The Indian rupee appreciated by 0.2% against the dollar. The Reserve Bank of India is expected to raise rates again next week, with a narrow majority of economists in a Reuters poll expecting a half-point hike.
Meanwhile, Egypt’s central bank, thwarting analysts’ expectations of a 100 basis point hike, left overnight interest rates unchanged on Thursday.
Sri Lankan authorities will hold talks with international creditors on Friday to start the process of restructuring billions of dollars of debt. For 2022 Emerging Markets FX performance chart see http://tmsnrt.rs/2egbfVh For 2022 MSCI Emerging Market Index performance chart see https://tmsnrt.rs/2egbfVh
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For the RUSSIAN market report, see (Reporting by Amruta Khandekar; edited by Uttaresh.V)
