EMERGING MARKETS-South African rand ticks up ahead of rate decision; stocks up for fifth day

Emerging market stocks extended their rally for a fifth straight session on Thursday, while South Africa's rand eked out slim gains ahead of an interest rate decision later in the day that is seen delivering the last hike of the cycle. The MSCI's index of emerging market stocks rose 1.1% by 0820 GMT, hovering near seven-month highs, while currencies ticked 0.1% higher.

Emerging market stocks extended their rally for a fifth straight session on Thursday, while South Africa's rand eked out slim gains ahead of an interest rate decision later in the day that is seen delivering the last hike of the cycle.

The MSCI's index of emerging market stocks rose 1.1% by 0820 GMT, hovering near seven-month highs, while currencies ticked 0.1% higher. South Africa's rand rose 0.1% against the dollar as investors stayed away from placing big bets ahead of the central bank's interest rate decision due at 1300 GMT.

Economists in a Reuters poll were split on the size of the increase with 11 of 20 economists expecting the Reserve Bank to hike rates by 50 basis points to 7.50%, while eight project an increase of 25 bps and one economist forecasted no change. "If they do deliver a 50 basis point hike, even if it's the last one that will continue to provide enough support for the rand," said Cristian Maggio, head of portfolio and ESG strategy at TD Securities, adding that they expect this to be the last hike in the tightening cycle for South Africa.

"But it's not just about the hike, it's also about the message that the central bank provides." Further, hopes that South Africa's government will next month lay out plans to take on a majority of the debt owed by beleaguered state utility Eskom lifted the company's bonds, providing some relief to investors facing a long and uncertain wait.

The Turkish lira was flat to higher against the greenback. Turkey's central bank said it will provide 2% foreign exchange conversion support to companies that bring forex into the country from abroad, sell it to the central bank and pledge not to buy forex for a period determined by the bank.

The rouble hit a more than one-week low against the dollar before paring some losses as the market waited for next week's month-end tax payments that will likely benefit the Russian currency. The Hungarian forint slipped 0.5% against the euro after two straight sessions of gains, while other central and eastern European currencies were subdued.

In Asia, the Export-Import Bank of China (EXIM) confirmed it has provided Sri Lanka with a two-year moratorium on its debt service payments, China's foreign ministry said. The Pakistani rupee plummeted against the dollar, according to trade data, in a second day of turmoil in the domestic currency market after unofficial controls were removed.

Overall, trading in emerging markets remained thin with China still away for the Lunar New Year.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)