EMERGING MARKETS-Turkish lira eases as data shows high inflation, rouble steadies
Sept 3- The Turkish lira eased for a fourth straight session on Thursday as data showed elevated inflation in August, while the Russian rouble steadied following steep losses in the previous session after Germany said Kremlin critic Alexei Navalny was poisoned. The rouble was nearly flat against the dollar after falling 2.6% on Wednesday as German…
* Turkish lira falls for fourth straight session
* Rouble flat after worst session in nearly three months
* South African rand up even as private sector activitycontracts
* Fall in Chinese stocks weighs on EM index
By Sagarika Jaisinghani
Sept 3 (Reuters) – The Turkish lira eased for a fourthstraight session on Thursday as data showed elevated inflationin August, while the Russian rouble steadied following steeplosses in the previous session after Germany said Kremlin criticAlexei Navalny was poisoned.
The rouble was nearly flat against the dollar afterfalling 2.6% on Wednesday as German Chancellor Angela Merkelsaid Navalny was the victim of a murder attempt with theNovichok nerve agent and that Russia must answer “difficultquestions”.
Russian assets were already under pressure in the past fewweeks due to protests and strikes in neighbouring Belarus. OnThursday, the rouble-based MOEX Russian stock indexrose for only the second time in six days as data showed steadygrowth in the country’s services sector.
An index of emerging market currencies eased0.1%, with the Turkish lira losing 0.5%, as data showedyear-on-year inflation of 11.77% in August, well above anofficial target after the currency tumbled to a series of recordlows last month.
“Economic recession was supposed to dampen inflation, butthis has not generally panned out; meanwhile, growth isre-accelerating across the region and Turkish local monetarypolicy has remained easy,” said Tatha Ghose, FX analyst atCommerzbank.
“There are no drivers in place to bring inflation magicallydown to help support the lira (and) the inflation-FX spiral isworsening.”
The lira has lost about 20% against the greenback in 2020 -two years after a full-blown currency crisis – despite constantcentral bank intervention, and is among the worst performingEuropean emerging market currencies so far this year.
The South African rand was a touch firmer even asdata showed private sector activity contracted for the 16thstraight month in August, fuelling concerns about the ability ofAfrica’s most industrialised economy to shake-off recession anda fiscal crisis.
Among eastern European currencies, the Czech crownwas nearly unchanged to the euro as data showed the unemploymentrate last month was unchanged at 3.8%. The Hungarian forintfirmed 0.1%, while the Polish zloty shed0.1%.
A basket of developing world stocks eased 0.2%,weighed down by a slide in Chinese stocks as investors pulledout of high-flying consumer firms on worries over loftyvaluations.
Turkey stocks rose 0.6%, while the South Africanbourse shed 0.7%.
For GRAPHIC on emerging market FX performance in 2020, see http://tmsnrt.rs/2egbfVhFor GRAPHIC on MSCI emerging index performance in 2020, see https://tmsnrt.rs/2OusNdX
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For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see(Reporting by Sagarika Jaisinghani in Bengaluru; editing byUttaresh.V)
