Friday Nov 15, 2024
Friday Nov 15, 2024
Saturday, 12 March 2022 01:43 - - {{hitsCtrl.values.hits}}
Reuters: Most emerging market currencies turned higher on Friday after Russian President Vladimir Putin hinted at some progress in Moscow’s talks with Ukraine, easing some selling pressure on units battered by the ongoing war.
Putin said “there are certain positive shifts, negotiators on our side tell me”, but did not elaborate.
The news helped to prop up financial markets, battered by concerns of rising global inflationary pressures and the fallout from Russia’s invasion of Ukraine.
Russia’s rouble hit a session high of 112.09 against the dollar in offshore trading, while the onshore rate also edged up.
Local stock markets remained largely shut by order of the central bank, which limited trading in stocks and bonds after the West rolled out economic sanctions against Russia.
Western sanctions on Russia have spurred a rally in commodity prices, which has benefited some emerging market exporters of oil, gold and other raw materials, but hurt importers and economies of countries with close proximity to both Ukraine and Russia.
The Turkish lira climbed 0.6% against the dollar after weakening as much as 1.2% earlier in the session, while commodity-rich South Africa’s rand edged 0.2% up, erasing earlier declines.
“The economic hit is real and we are not sure we have fully grasped yet the magnitude of the financial aftershocks that come from taking out of commission the financial construct of one of the biggest commodity producers in the world,” Francesc Balcells, chief investment officer of global emerging market debt at FIM Partners wrote in a client note.
The MSCI’s index for emerging market stocks pared some losses, and was down 0.9%. The index is on track for its fourth weekly fall, down about 4.7%.
Tensions in Ukraine have put the risk appeal of emerging markets under pressure amid fears of imminent monetary tightening cycles from the developed world to contain global inflationary pressures.
Data on Thursday showed US inflation hitting a four-decade high, further solidifying bets that the Federal Reserve will raise its benchmark lending rate at the end of its policy meeting next week, while the European Central Bank also surprised with a hawkish tone.
