LONDON Feb 13 Ukraine's hryvnia fell towards
last week's 4-year low versus the dollar and its sovereign bonds
tumbled on Thursday as concerns intensified about the economic
outlook, while higher U.S. Treasury yields weighed on broad
The Nigerian naira tested a two-year low against the dollar
a day after President Goodluck Jonathan sacked four cabinet
members in the latest of a wave of government changes before
elections next year.
South Africa's rand, the Turkish lira and
Hungarian forint also traded weaker.
Concerns have been growing as to how Ukraine could keep
supporting its currency and pay off its debt as Russia suspended
a $15 billion bailout after President Viktor Yanukovich sacked
his prime minister on Jan. 28.
"It is continued fallout from the political crisis," said
Richard Segal, analyst at Jefferies.
That dismissal was seen as a concession to anti-government
protesters who have taken to the streets to demonstrate against
moves that would bring the former Soviet republic closer into
Moscow's economic orbit.
The central bank brought in temporary currency controls last
week after the hryvnia fell below 9 per dollar for the first
time in five years.
Ukraine's sovereign dollar bond due 2020 hit a two-year low
of 83.50 cents while state energy firm Naftogaz'
2014 bond hit its lowest level since October 2011
The benchmark emerging equity index slipped,
following China's shares which fell for the first time
in five days because of weakness in the property sector.
Higher Treasury yields also weighed on general sentiment as
investors pull money away from emerging market assets to the
recovering U.S. economy.
U.S. Treasury yields rose on Wednesday after the U.S. House
of Representatives passed a measure on the debt ceiling and a
new Federal Reserve chair vowed to maintain the bank's current
strategy of reducing asset purchases at a gradual pace.
Yields on U.S. 30-year bonds climbed to
three-week peaks, while those on 10-year notes hit
"At the end of the day, U.S. rates will be tighter and
that's not going to be positive for emerging markets. Also it's
not easy to have a clear view on what's happening in China,"
said Gaelle Blanchard, strategist at Societe Generale in Paris.
The rand fell half a percent to 11.06 per dollar while the
lira was a touch softer at 2.19.
Turkey launched a 2045 dollar bond earlier, with the prices
up 1.25 point already.
Hungary's forint was down 0.3 percent at 310.32,
with focus turning to next week's monetary policy meeting.
Investors are watching inflation data due on Friday for
signals that the central bank could cut interest rates further
from record lows of 2.85 percent despite market tensions.
The Nigerian naira fell to 165.78 per dollar,
bringing its year-to-date losses to more than 3 percent.
Africa's second largest economy and biggest oil producer has
been a top frontier market investment destination over the past
few years but political instability is a concern ahead of
The central bank announced new rules last week requiring
currency dealers to put naira in their accounts at the bank two
days before bidding in its forex auctions, but the move did
little to stem the naira's decline.
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