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EM FX flat, stocks fall 0.2% for third day
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Hungarian forint falls for second day
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Zambia creditors expected to sign debt relief MOU in May -
sources
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Salvadoran spreads tighten on IMF deal bets
By Bansari Mayur Kamdar April 20 (Reuters) - Stocks in emerging markets slipped for a third straight session on Thursday, while currencies were subdued against a steady dollar as caution reigned ahead of a barrage of central bank meetings in the coming weeks. The MSCI's index of emerging market stocks fell 0.2% by 0800 GMT, while the regional currencies index was flat. The U.S. dollar index was flat after strong U.S. banking results strengthened expectations that the Federal Reserve would keep monetary policy tight for a while longer. China's yuan weakened slightly against the dollar after local yuan benchmark rates were kept steady, leaving markets fretting about domestic growth and export flows. Data this week showed the world's second-largest economy grew faster than expected in the first quarter, as the end of strict COVID curbs lifted businesses and consumers out of crippling pandemic disruptions.
However, uneven recovery trends pulled down China's
blue-chip CSI 300 Index and Shanghai Composite Index for a second straight session.
In central and eastern Europe, Hungary's forint extended losses to 379 against the euro after a fall of nearly
2% in the previous session on comments by the deputy governor of
its central bank that the National Bank of Hungary (NBH) could
cut its 25% top collateralised loan rate next week.
"For now, the forint has moved back to the levels of early
April which, looking at the last few months, is not too bad,"
Frantisek Taborsky, EMEA FX strategist at ING, said in a note.
"On the other hand, the positioning is very long HUF and the
forint may sell off further in the coming days. In our view,
levels in the 385-390 EUR/HUF band could already be a warning
sign for the central bank to reconsider some of the statements
made yesterday."
The South African rand edged up 0.1% against an
easing dollar, tracking global drivers, while Turkey's lira
slipped in early trade.
Russia's rouble inched slightly higher
against the greenback, halting a slide sparked by falling oil
prices in the previous session and set to gain support from a
favourable approaching tax period.
Elsewhere in emerging markets, Salvadoran bond spreads
narrowed on Wednesday to their tightest since December 2021 in a
rally triggered by hopes for a key new finance ministry adviser
to help secure a debt deal with the International Monetary Fund
(IMF).
Zambia's official creditors, which include China, are
getting closer to signing a memorandum of understanding on debt
relief to the country in May, which would be key to paving the
way for more IMF funding, sources told Reuters.
(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by
Clarence Fernandez)
