EMERGING MARKETS-Virus fears hit stocks, FX; Turkey's lira slides for the 7th day

Most developing world stocks and currencies fell on Monday as a rise in domestic COVID-19 cases and fears over another lockdown in Europe hit risk appetite, with the Turkish lira plumbing new lows as focus turned to a central bank meeting this week.

Most developing world stocks and currencies fell on Monday as a rise in domestic COVID-19 cases and fears over another lockdown in Europe hit risk appetite, with the Turkish lira plumbing new lows as focus turned to a central bank meeting this week. The lira slid for the seventh straight session to an all-time low of 7.59 against the dollar by 0838 GMT on expectations the central bank would stand pat but continue its back-door tightening measures at the end of its policy meeting on Sept. 24.

Concerns over depleted forex reserves, negative yields due to high inflation, and tensions with the European Union over the east Mediterranean have pushed the lira down over 20%, making it one of the worst performing currencies this year. "The main risk ... is that the authorities tighten policy too little and too late as they prefer to remain supportive of growth, a policy course which would add to the risks around the lira," said Ehsan Khoman at MUFG Bank.

The Russian rouble, a net oil exporter, hovered near five-month lows versus the greenback, pressured by a sharp fall in crude prices due to the potential return of output from Libya. The rouble extended its slide from last week when the central bank left the door open for more interest rate cuts. It added to the currency's pressures over fears of new sanctions from the West in relation to Russia's possible meddling in the political crisis in neighbouring Belarus and the suspected poisoning of Kremlin critic Alexei Navalny.

Among central European currencies, the Czech crown weakened 0.4% against the euro as the country's health minister resigned following criticism over his handling of the coronavirus pandemic as the country sees a surge in new cases. Asian and European stocks took a hit on Monday as British Prime Minister Boris Johnson contemplated a second national lockdown to curb an accelerating coronavirus outbreak, sparking fears of further damage to the global economy.

Russia's dollar-denominated RTS index and Budapest's main index led losses among emerging market stocks with their near 2% falls. For TOP NEWS across emerging markets

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