December 15, 2017 / 10:32 AM / a year ago

EMERGING MARKETS-Emerging currencies digest central bank decisions

LONDON, Dec 15 (Reuters) - Emerging currencies strengthened on Friday but some eyed weekly losses as investors digested a deluge of central bank decisions.

The U.S. Federal Reserve's much-anticipated rate hike on Wednesday sounded the starting gun for emerging market central banks to adjust their policies.

Turkey's lira strengthened 0.7 percent on the day, but was on track for a weekly loss following a 2 percent tumble on Thursday after the central bank delivered a smaller-than- expected hike to the late liquidity window, disappointing markets fretting over inflation at 14-year peaks.

Mexico's peso gained 0.3 percent, but was on track for a third week of losses despite the country's central bank matching the Fed interest rate rise and signalling it was ready to act again to rein in the jump in consumer prices.

Russia's rouble was on track for a weekly gain but treading water ahead of a central bank meeting expected to deliver a key interest rate cut to 8 percent in what would be the sixth rate reduction so far this year.

Rabobank strategist Piotr Matys expected Russia's central bank to continue trimming interest rates in 2018 as long as the rouble stays stable.

"The target for where the policy rate will be when the easing cycle finishes is between 6.5-7 percent, so we are 100-150 basis points from that target," he said.

"One of the challenges for the central bank will be to bring inflation expectations lower, as there is still a wide gap between headline inflation and expectations among households."

South Africa's rand was stronger on the day and the week with investors awaiting the outcome of the ruling African National Congress's leadership elections on the weekend.

The party will announce a successor to current president Jacob Zuma as party leader on Sunday following a closely fought and bruising leadership battle.

Emerging market stocks were nursing losses, with the MSCI benchmark index 0.5 percent, weighed down by Wall Street's weakness on concerns about the progress of U.S. tax reform.

Hong Kong and Chinese mainland stocks took a tumble of around 1 percent on the day, but heavyweight South Korea chalked up a 0.5 percent gain.

Russian stocks suffered some of the biggest losses of the day, pulled lower by financial stocks after the central bank said it would bail out Promsvyazbank, the country's 10th biggest lender by assets.

For GRAPHIC on emerging market FX performance 2017, see tmsnrt.rs/2e7eoml For GRAPHIC on MSCI emerging index performance 2017, see tmsnrt.rs/2dZbdP5

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see)

Emerging Markets Prices from Reuters Equities Latest Net Chg % Chg % Chg

on year

Morgan Stanley Emrg Mkt Indx 1115.52 -5.70 -0.51 +29.37

Czech Rep 1063.34 -2.08 -0.20 +15.38

Poland 2418.61 -16.00 -0.66 +24.16

Hungary 38567.96 -48.23 -0.12 +20.51

Romania 7606.46 +19.20 +0.25 +7.36

Greece 768.16 +0.59 +0.08 +19.35

Russia 1143.76 -9.56 -0.83 -0.74

South Africa 51072.43 -425.93 -0.83 +16.33

Turkey 09200.88 -465.56 -0.42 +39.75

China 3266.15 -26.29 -0.80 +5.24

India 33476.36 +229.66 +0.69 +25.73

Currencies Latest Prev Local Local

close currency currency

% change % change

in 2017

Czech Rep 25.69 25.69 +0.03 +5.15

Poland 4.22 4.22 +0.08 +4.38

Hungary 313.91 314.15 +0.08 -1.62

Romania 4.63 4.63 -0.06 -2.09

Serbia 119.20 119.17 -0.03 +3.48

Russia 58.86 58.84 -0.04 +4.08

Kazakhstan 335.57 335.20 -0.11 -0.57

Ukraine 27.65 27.40 -0.90 -2.35

South Africa 13.43 13.50 +0.50 +2.24

Kenya 103.15 103.20 +0.05 -0.76

Israel 3.52 3.52 +0.04 +9.43

Turkey 3.86 3.89 +0.70 -8.60

China 6.61 6.61 +0.03 +5.08

India 64.15 64.33 +0.28 +5.92

Brazil 3.34 3.34 +0.00 -2.65

Mexico 19.14 19.15 +0.02 +8.21

Debt Index Strip Spd Chg %Rtn Index

Sov'gn Debt EMBIG 315 -1 .03 8 06.32 1

All data taken from Reuters at 09:53 GMT. Currency percent change calculated from the daily U.S. close at 2130 GMT.

Reporting by Karin Strohecker; additional reporting and graphic by Claire Milhench; editing by Andrew Roche

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below