*
Emerging markets attract $22.9 bln portfolio inflows in
February
*
Debt ex-China adds $18.7 bln, China debt sees $0.7 bln
outflow
By Rodrigo Campos NEW YORK, March 9 (Reuters) - Foreign investors poured more cash into emerging market portfolios in February, though inflows were far smaller than in January as higher rates in the United States and Europe loom, the Institute of International Finance said on Thursday. February saw $17.9 billion of inflows to debt securities and $4.9 billion to stocks, IIF data show. The combined $22.9 billion net inflows compares to $66 billion in January. Flows were a two-pronged story, with the first part of the month feeding off of new debt that followed record issuance in January, while inflation and higher rate concerns made a comeback in the second half of February, the IIF said. "In the near future, we see the level of inflows lowering, product of a more cautious market, given the still hawkish monetary stance from the (Federal Reserve and European Central Bank)," said IIF economist Jonathan Fortun in a statement. "Monetary policy uncertainty may boost demand for dollar protection, as the relationship between EM currency and U.S. interest-rate volatility continues to strengthen." Fed Chairman Jerome Powell this week brought back the possibility of a higher and faster target rate, though he said economic data ahead of a March 22 decision would tip the balance on whether rate hikes will accelerate. The key U.S. payrolls report for February is due Friday. A steeper-than-expected climb to a 6% fed funds rate would hurt the weakest emerging markets the most, analysts said. Debt securities in China saw an outflow of $0.7 billion, while flows to Chinese equities stood at $2.4 billion. Chinese debt has posted outflows in 11 of the past 13 months, the data show. Regionally, Asia and Latin America saw the largest inflows last month with $11.8 billion and $7.3 billion respectively. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ EM portfolios inflows decelerate in February ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Rodrigo Campos; Editing by Sharon Singleton)
