Most emerging market currencies
firmed on Thursday as the dollar slipped following less-hawkish
signals from the US Federal reserve, although Turkey’s lira
hovered near record lows and South Africa’s rand was subdued
after central bank decisions.
Brazil’s real jumped 0.9%. Brazilian Senator Marcelo
Castro told Reuters that the spending cap waiver bill, which
aims to exempt at least 100 billion reais ($19 billion) for
welfare spending next year, must be approved by Dec. 10 so
Lawmakers can focus on the country’s budget for next year.
Meanwhile, data showed consumer prices hit 0.53% in
mid-November but came in below market forecasts, reinforcing
views that the Brazilian central bank would stick to its current
plans after ending an aggressive tightening cycle.
Brazil stocks gained 2.8%, with shares of
heavyweight Petrobras up 3.6%. President-elect Luiz
Inacio Lula da Silva’s aide said the incoming leftist government
Had no intention of causing a “breakdown” of the state-run oil
giant and that everything would be discussed with markets.
Mexico’s peso slipped 0.1%. Minutes from the Bank of
Mexico’s last policy meeting showed policymakers see price
pressures easing but more rate hikes possible as core inflation
In South Africa, the rand was flat against the dollar
After the central bank hiked repo rate by 75 basis points to
tame rising inflation, but lowered its growth forecast for the
year impacted by power cuts as coal-fired state power utility
Eskom struggles with power generation.
However, Turkey’s central bank cut its policy rate by 150
basis points to 9% as expected and decided to halt its easing
cycle, in line with President Tayyip Erdogan’s call for a
single-digit rate by year-end despite inflation above 85%.
The lira inched up after hitting a record low of
18.66 to the dollar earlier in the session.
The currency has lost around 28% so far this year, thanks to
unconventional monetary policy which in turn worsened inflation
and foreign exchange reserves, hammering its appeal to foreign
Citi strategists said that focus will now be on the 2023
monetary and exchange rate document, set to published in
December, which will be watched for a comprehensive discussion
of additional measures that the central bank will employ.
While emerging market central banks started monetary policy
tightening way ahead of their developed peers like US Fed and
European Central Bank, inflation has consistently exceeded their
Most other currencies rose, lifting MSCI’s index of emerging
market currencies 0.5%, as minutes of the Fed’s meeting earlier
This month showed a “substantial majority” were in favor of
slowing the pace of interest rate hikes.
Key Latin American stock indexes and currencies:
Stock indexes Latest Daily % change
MSCI Emerging Markets 945.81 1.45
MSCI LatAm 2209.86 2.49
Brazil Bovespa 111924.33 2.83
Mexico IPC 51757.88 -0.45
Chile IPSA 5273.72 0.24
Argentina MerVal 161249.31 1.694
ColombiaCOLCAP 1264.86 -0.09
Currencies Latest Daily % change
Brazil real 5.3098 -0.02
Mexico peso 19.3876 -0.17
Chile peso 910.2 0.63
Colombia peso 4904.7 -0.58
Peru sol 3.8399 0.16
Argentina peso (interbank) 165.1700 -0.20
Argentina peso (parallel) 315 -0.95
(Reporting by Susan Mathew and Devik Jain in Bengaluru; Editing
by Nick Zieminski and Daniel Wallis)