Economic news

Oil Prices Lift Russian Rouble; Lira Down

* Lira slips 0.2% against weaker dollar

* Belarus dollar denominated bonds fall

* Poland to discuss situation in Belarus with opposition; zloty up

* Hungarian forint flat; cenbank decision on Tuesday eyed

* EM stocks up on COVID-19 treatment optimism, upbeat U.S data

By Susan Mathew

Aug 24 (Reuters) - Turkey’s lira extended losses on Monday after ratings agency Fitch lowered the country’s outlook to ‘negative’, while Belarus bonds fell as protests demanding leader Alexander Lukashenko step down intensified.

Emerging market stocks jumped 1% after the U.S. Food and Drug Administration approved the use of a recovered COVID-19 patent’s blood plasma as a treatment option, while upbeat business surveys from the United States kept hopes for an economic recovery alive.

The dollar weakened against most rivals ahead of the U.S. Federal Reserve’s annual Jackson Hole gathering on Thursday, where Fed Chair Jerome Powell is expected to talk about the bank’s monetary policy framework review.

In Turkey, Fitch changed its outlook to ‘negative’ from ‘stable’ on Friday, citing depleting foreign exchange reserves, weak monetary policy credibility and a sizeable current account deficit among factors exacerbating external financing risks.

The lira fell 0.2%. The currency, down 19% this year, has been plumbing new lows recently, but found some footing last week after a significant gas find in the Black Sea.

The news, which was later confirmed by President Tayyip Erdogan, would lessen the country’s energy imports and help narrow its current account deficit.

South Africa’s rand rose 1.1% to hit a three-week high, extending gains to a fifth straight session, while higher oil prices lifted Russia’s rouble from over three-month lows even as chaos in neighbouring Belarus rose.

Tens of thousands of citizens flooded into Minsk to protest a disputed presidential election earlier this month. Russia on Friday had said it was ready to help Belarus if asked.

“If there is an escalation and Russia is asked to intervene, that would be very negative for Russian assets. Not immediately or directly, but through sanctions imposed by Western diplomacies,” said Cristian Maggio, head of EM strategy at TD Securities.

“In that case, it would be negative for the rouble even beyond any positive moves for oil.”

Yields on Belarus 2030 dollar-denominated bonds rose, while prices of Belarussian dollar-denominated debt broadly fell, across different maturities. ,.

Poland’s government will discuss the situation in its eastern neighbour as it sees no quick end to the situation, the Prime Minster said. Against a stronger euro, the Polish zloty rose 0.2%.

Hungary’s forint was flat against the single currency ahead of a central bank interest rate meeting on Tuesday. After 15-basis-point cuts in the last two months, the bank is expected to stand pat, a Reuters poll showed.

Reporting by Susan Mathew in Bengaluru; Editing by Amy CarenDaniel

Source: Reuters


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