* Weakening dollar keeps most EM currencies higher
* South African miners rally on record gold prices
* Turkey’s lira slips on concerns over FX reserves, debt
By Shreyashi Sanyal
Aug 5 (Reuters) – Most emerging market currencies continued their advance against a weaker dollar on Wednesday, while Turkey’s lira fell more than 1% as concerns remained about the central bank’s depleted forex reserves and higher foreign debt obligations.
South Africa’s rand bounced from two-month lows, while Russia’s rouble firmed 0.6% against a sliding dollar after a stalled U.S. coronavirus relief package and the prospect of further monetary easing hit the world’s reserve currency.
The weakening greenback also aided a rise in gold prices, which scaled to a new high as bond yields hit new lows. Gold miners in South Africa rallied, while the main stock index jumped 2%, tracking its best day in more than a month.
The MSCI’s index for emerging market stocks jumped 0.9%.
Gold Fields led the charge among South African miners with its 9% jump after it said half-year profits could rise by more than 300%, thanks mostly to an increase in gold prices.
Turkey’s lira sank in volatile trading and overnight rates in a London-based swap market tumbled back after topping 1,000% the day before.
Analysts at Commerzbank say the swap rates were close to 1,200%, last witnessed in the spring of 2019. This was also around the time Turkish banks cut funding to the market and effectively made it impossible to short the lira, thereby curbing its losses.
“The problematic situation of re-emergence of the current account deficit combined with a deeply negative real interest rate remains applicable to Turkey.”
Investors are worried about a drop to $51 billion from $81 billion this year in the central bank’s gross FX reserves, as well as over Turkey’s high foreign debt obligations and Turks buying more hard currencies.
Central European currencies such as the Hungarian forint and the Polish zloty were flat against the euro.
In other parts of the Middle East, a powerful blast in port warehouses storing highly explosive material in the Lebanese capital Beirut on Tuesday killed 100 people and injured nearly 4,000 in a toll that officials expected to rise.
The blast was the most powerful in years in Lebanon, already reeling from economic crisis and a surge in coronavirus infections.
For GRAPHIC on emerging market FX performance in 2020, see tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2020, see tmsnrt.rs/2OusNdX
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For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Andrew Cawthorne)
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