World Markets

EMERGING MARKETS-Oil prices lift Russian rouble as chaos in Belarus intensifies; Lira down

Credit: REUTERS/MAXIM SHEMETOV

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.

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 .MSCIEF 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. MKST/GLOB.N

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. FRX/

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 TRY= 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 ZAR= rose 1.1% to hit a three-week high, extending gains to a fifth straight session, while higher oil prices lifted Russia's rouble RUB= from over three-month lows even as chaos in neighbouring Belarus rose. O/R

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 XS1760804184=TE rose, while prices of Belarussian dollar-denominated debt broadly fell, across different maturities. BY163436922=, BY212009199=, BY163436906=.

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 EURPLN= rose 0.2%.

Hungary's forint EURHUF= 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.

For GRAPHIC on emerging market FX performance 2020, see http://tmsnrt.rs/2egbfVh

For GRAPHIC on MSCI emerging index performance 2020, see https://tmsnrt.rs/2OusNdX

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB

(Reporting by Susan Mathew in Bengaluru; Editing by Amy Caren Daniel)

((susan.mathew@thomsonreuters.com; +91-80-6749-1130;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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