Economic news

TRY down ahead of Rate Call, RUB falls on Ukraine Tensions

  • Lira falls ahead of one-week repo rate decision
  • S.African rand rises on higher gold prices
  • Rouble leads declines among EMEA FX

Feb 16 (Reuters) - Turkey's lira edged lower on Thursday ahead of a central bank decision on the one-week repo rate, while the Russian rouble fell after media reports of Ukrainian government forces attacking Russia-backed separatists.

The lira fell 0.2%, eyeing a weekly decline of 0.8%. A Reuters poll of economists expect Turkey's central bank to keep its one-week repo rate unchanged at 14% later in the day.

The Turkish central bank, which has been under pressure from President Tayyip Erdogan, has slashed its policy rate by 500 basis points since September, sparking a currency crisis late last year and sending inflation galloping to near 50%.

"It seems to me as if the measures introduced recently, which in my view also act as subliminal capital controls, are also aimed at keeping the key rate stable for now and avoiding cutting it further," said Antje Praefcke, a FX and emerging markets analyst at Commerzbank.

"After all, further key rate cuts involve the risk of a renewed wave of lira depreciation, a fact that the officials have no doubt recognised."

Turkey also sold $3 billion in Islamic bonds in its first U.S. dollar-denominated debt sale since September on Wednesday.

Turkish stocks added 0.4%, while the broader MSCI emerging markets stocks index gained 0.2%. China stocks, powered gains in early Asian trading on bets of more monetary policy easing.

Most emerging market currencies dipped after a spike in the dollar and other safe havens as Russian-backed rebels in eastern Ukraine accused Kyiv government forces of shelling their territory with mortars. 

Russia's rouble fell 0.7% to lead declines among major European, Middle Eastern and African currencies, and was set to snap a three-day winning streak.

Despite Thursday's fall, the rouble has been able to build gains this week, as an interest rate hike by the Russian central bank, rising oil prices and a pause in foreign currency purchases made it an attractive bet for investors.

The MSCI's emerging markets eastern Europe sub-index fell 2.2%.

South Africa's rand edged 0.2% higher as gold prices rose amid geopolitical tensions, while blue-chip stocks in the region gained 0.5%.

South African miner Gold Fields Ltd reported a 20% rise in full-year profit but shares fell 0.9% as it flagged growing cost pressures.

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

Source: Reuters

To leave a comment you must or Join us

More news

Back to economic news list

By visiting our website and services, you agree to the conditions of use of cookies. Learn more
I agree