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Turkish lira down ahead of rate review, ruble falls on Ukraine tensions

  • Pound ahead of one-week repo rate decision
  • South African rand rises on rising gold prices
  • Ruble leads decline among EMEA currencies

Feb 16 (Reuters) – The Turkish lira fell slightly on Thursday ahead of a central bank decision on the one-week repo rate, while the Russian ruble fell after media reports that Ukrainian government forces were attacking separatists supported by Russia.

The lira fell 0.2%, pricing in a weekly decline of 0.8%. A Reuters poll of economists expects Turkey’s central bank to keep its one-week repo rate unchanged at 14% later today. Read more

Turkey’s central bank, which is under pressure from President Tayyip Erdogan, has cut its key rate by 500 basis points since September, triggering a currency crisis late last year and driving inflation to almost 50% .

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“It seems to me that the measures introduced recently, which in my opinion also act as subliminal capital controls, are also aimed at keeping the key rate stable for the time being and avoiding reducing it further,” said Antje Praefcke, specialist. foreign exchange and emerging markets. analyst at Commerzbank.

“After all, further cuts in policy rates carry the risk of another wave of lira depreciation, a fact that officials have no doubt acknowledged.”

On Wednesday, Turkey also sold $3 billion of Islamic bonds in its first sale of US dollar-denominated debt since September. Read more

Turkish stocks (.XU100) gained 0.4%, while the broader MSCI Emerging Markets Equity Index (.MSCIEF) gained 0.2%. Chinese stocks (.CSI300), (.SSEC) fueled early gains in Asian trading on bets of further monetary policy easing.

Most emerging market currencies plunged after a surge in the dollar and other safe havens as Russian-backed rebels in eastern Ukraine accused government forces in Kiev of bombarding their territory with mortars . Read more

The Russian ruble fell 0.7% to lead major European, Middle Eastern and African currencies lower, and was on course to snap a three-day winning streak.

Despite Thursday’s tumble, the ruble was able to rack up gains this week as an interest rate hike by Russia’s central bank, rising oil prices and a pause in currency buying made it an attractive bet. for investors.

The MSCI Eastern European Emerging Markets Sub-Index (.MIME00000PUS) fell 2.2%.

The South African rand edged up 0.2% as gold prices rose amid geopolitical tensions, while the region’s blue chip stocks (.JTOPI) gained 0.5% .

South African miner Gold Fields Ltd (GFIJ.J) reported a 20% rise in full-year profits, but shares fell 0.9% due to mounting cost pressures.

For 2022 Emerging Markets FX Performance CHART see http://tmsnrt.rs/2egbfVh

For the GRAPH on the performance of the MSCI emerging index in 2022, see https://tmsnrt.rs/2OusNdX

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Reporting by Shreyashi Sanyal and Anisha Sircar in Bengaluru; Editing by Subhranshu Sahu

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