Band Susan Mathew
September 23 (Reuters) – Movements by the central bank grabbed headlines in emerging market currencies on Thursday, with the South African rand making a decision to hold rates on hold, while the Brazilian real strengthened after an expected rise of 100 basis points overnight.
Turkish lira TRY = remained in the red after a surprise rate cut despite rising inflation.
The Reserve Bank of South Africa left the policy rate unchanged at an all-time high of 3.5% as expected, but raised its economic growth forecast for 2021 to 5.3% from 4.2% and said that Risks to the short-term inflation outlook were measured to live up to expectations. Upside down.
The rand ZAR = rose to 14.6881 against the dollar immediately after the decision but quickly edged down to 14.73, up 0.4%.
Meanwhile, in an aggressive battle against inflation, Brazil’s central bank raised the benchmark Selic rate by 100 basis points overnight to 6.25% and signaled another of the same measure on the month. next. But it failed to boost the real BRBY significantly because it was considered less hawkish than expected.
“We believe BRL’s bullish record has been compromised by China’s weaker growth outlook, which has already led to a severe deterioration in the terms of trade for Brazil, which may continue,” the strategists said. from Citi.
“On top of that, the central bank is becoming more dovish on the margin. An aggressive central bank was one of the main reasons for sticking to the BRL for a long time.”
But the currency, with the Mexican peso MXN =, outperformed mixed moves by most other Latam peers as lower commodity prices limited the advantage of a weakening dollar.FRX /WHEREMET / L
mexican peso MXN = firmed 0.3% after data showing a larger-than-expected increase in annual inflation in the first half of September boosted bets on rate hikes. In the middle of the month, consumer prices accelerated 0.42% to reach annual inflation of 5.87%, already exceeding the 5.59% recorded in August.
Meanwhile, Argentina on Wednesday paid nearly $ 1.9 billion to the International Monetary Fund as it tries to reorganize the more than $ 40 billion it still owes. Payment was made with funds Argentina received from the IMF’s Special Drawing Rights program.
Latam shares joined a wider rally in emerging and global equity markets, reassured by indebted Chinese developer Evergrande 3333.HK on its repayments has allayed some fears of contagion of a possible default. MKTS / GLOB
Main Latin American Stock Indices and Currencies at 1906 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 =
Brazilian real, South African rand after cenbank move https://tmsnrt.rs/3CFKPTn
(Reporting by Susan Mathew and Shreyashi Sanyal in Bangalore; Editing by Andrea Ricci and Alex Richardson)
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