EMERGING MARKETS-Fake central banks keep currencies afloat
By Susan Mathew and Shreyashi Sanyal
September 30 (Reuters) – Hclumsy central banks lifted most emerging market currencies on Thursday, with the Colombian peso and Czech koruna recovering from the rate hikes, while an emerging market equity index built on the day’s gains as most Latam exchanges rose as well.
MSCI Emerging Equity Index .MSCIEF resumed from five-week lows to increase by 0.2%, with a 0.3% gain in Brazil’s Bovespa Index .BSVP – most among Latam peers – adding to gains elsewhere.
Czech crown EURCZK = Seemed to post its best session in nearly 11 months against the euro after rising 75 basis points to 1.5%. The Mexican Peso MXN = fell 0.7%, while the Colombian currency COP = increased by 0.8% after 25 basis points increase of respective central banks of the two countries.
The Polish zloty EURPLN =firmed at 0.5% vs. euro for its biggest rise since April after minutes from the last central bank meeting suggested that a rate hike may be imminent, while Russia is expected to hike next month for the sixth time this year to curb inflation.
Most emerging market central banks have been on an upward cycle as a fragile recovery from the pandemic stoked inflation, helping currencies stay supported against a dollar now at year-long highs. FRX /
“As long as emerging market central banks do not fall behind, monetary pressures should be relatively well contained, potentially creating attractive opportunities on local currency debt …” said Patrick Curran, senior economist at Tellimer, at the Reuters Global Markets Forum. .
The real one from Brazil BRBY lost 0.7% after the central bank projected economic growth of 2.1% for 2022, down from a revision to 4.7% for this year, citing its aggressive tightening cycle compressing growth.
The real is expected to experience its worst month since March this year and its biggest quarterly loss since March 2020, when the coronavirus pandemic virtually crippled economic activity.
Chilean peso CLP = lost about 10% this quarter. The currency slumped to a 15-month low on that day as copper prices eased. Data on Thursday showed Chile’s copper production fell in August. MET / L
Currency of the world’s second largest copper producer, Peru PEN = is on track to experience its largest quarterly decline since 2013, down 6.7%.
Among stocks, Brazilian oil company Petrorio PRIO3.SA jumped 7% on report saying it has highest bid for Petrobras PETR4.SA Albacora field, while the Sabesp sewerage company SBSP3.SA rose 3.4% after its board’s move towards privatization.
America Movil, Mexico’s largest telecommunications company AMXL.MX gains extended after shareholders approved a plan to split off its Latin American towers business.
Main stock market indices and currencies in Latin America at 1834 GMT:
Stock market indices
% daily change
MSCI Emerging Markets .MSCIEF
MSCI Latin America .MILA00000PUS
Brazil Bovespa .BVSP
Mexico CPI .MXX
Chile IPSA .SPIPSA
Argentina MerVal .MERV
Colombia COLCAP .COLCAP
% daily change
Real brazil BRBY
mexican peso MXN = D2
Chilean peso CLP = CL
Colombian peso COP =
Peru soil PEN = PE
Argentine peso (interbank) ARS = RASL
Argentine peso (parallel) ARSB =
(Reporting by Susan Mathew, Shreyashi Sanyal and Lisa Pauline Mattackal in Bangalore; Editing by Andrea Ricci and Marguerita Choy)
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