LONDON Jan 30 Emerging market currencies
extended their slide against the dollar on Thursday, shrugging
off central bank attempts to shore them up and raising pressure
on more countries to step in to halt capital flows.
Fears about emerging economies intensified after the
Federal Reserve withdrew more of its monetary stimulus on
Wednesday and after Chinese manufacturing was seen in a survey
slipping to a six-month low.
The Turkish lira fell more than 1 percent to 2.2810 per
dollar, approaching record lows set earlier this week and
fully erasing gains made after the central bank surprised the
market with a whopping 425 basis point rate hike
Local stocks lost 1.3 percent. The lira's one-month
implied volatility shot above 20 percent on Wednesday,
its highest in nearly 5 years.
The South African rand also ignored a surprise 50 basis
point interest rate hike from the central bank on Wednesday,
hitting a fresh five-year low of 11.38 per dollar while
the yield on benchmark government bonds jumped 36 bps
to 7.36 percent.
"The concern here comes with the fact that we've had major
emerging central banks resort to tighter policy rates to defend
their currencies, but have failed fairly miserably," said Abbas
Ameli-Renani, emerging market strategist at RBS.
The Russian rouble hit a record low of 48.21 per euro
and also fell to the lowest level since March
2009 against the dollar.
The five-year Russian government bond yield hit a
16-month high, with the yield rising 70 basis points this week
The Hungarian forint fell 1 percent to a fresh two-year low
of 312.65 per euro.
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For TURKISH market report, see
For RUSSIAN market report, see )