EMERGING MARKETS-Currencies slide as dollar, commodity prices fall
(There will be no Latam focused emerging markets reports on Friday, April 15, on account of the Good Friday holiday. Reuters will resume coverage on Monday, April 18.) * Commodity currencies lose 1% * Turkey’s lira deepens declines after cenbank holds rate * Petrobras board votes in new CEO * Eletrobras at near nine-month highs By Susan Mathew April 14 (Reuters) – Emerging market currencies fell on Thursday as the dollar regained strength ahead of a long weekend, with commodity currencies losing more than 1%, while Turkey’s lira deepened declines after the bank meeting held the policy rate. Currencies of South Africa, Brazil, Mexico and Chile fell 1% each as oil and gold prices fell. Turkey’s lira fell 0.3% to 14.62 after the central bank held its policy rate at 14% despite inflation at 61%. The move follows a series of interest rate hikes across emerging markets overnight including Singapore and Argentina. “It doesn’t look like policymakers (in Turkey) are set to reverse course, which means that as long as the war in Ukraine weighs on inflation expectations globally… policy is set to be left unchanged,” said Ima Sammani, FX analyst at Monex Europe. “Turkey’s government may lean more heavily on unconventional policy tools to shore up the FX rate and bolster currency reserves, however, if history is any guide, these measures only provide temporary relief to the Turkish lira.” A drop in the euro following the European Central Bank’s decision to move slowly on monetary policy tightening spurred the dollar, leaving an index of emerging market currencies to mark a second week of losses. In Brazil, investors also had their eyes on the presentation of the 2023 Budget guidelines bill. Sources said the government plans an across-the-board 5% salary increase for public servants starting in July in an attempt to end protests and strikes affecting public services – a move that raises questions about the government breaching the spending cap. With presidential elections due in Brazil in October, leftist former President Luiz Inacio Lula da Silva’s lead was halved in a month by far-right President Jair Bolsonaro, a poll showed. Among stocks, Brazil’s Bovespa fell 0.2% to hover near three-week lows, with miner vale proving the biggest drag. Oil major Petrobras slipped 0.9%. Shareholders of the company voted Jose Mauro Coelho onto its board, paving the way for the government technocrat to take the helm of the state-run company. Petrobras said it received 5.26 billion reais ($1.12 billion) from Shell regarding the compensation on the latter’s 25% stake in the Atapu oil block. Meanwhile, state-run utility Eletrobras hit near nine-month highs after Brazil’s Economy Minister Paulo Guedes said that the federal audit court will vote on the Eletrobras’ privatization next week. Markets in Argentina, Colombia, Peru and stock markets in Mexico were closed for the Holy Thursday holiday. Key Latin American stock indexes and currencies at 1418 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1116.48 -0.25 MSCI LatAm 2590.12 -1.69 Brazil Bovespa 116538.23 -0.21 Chile IPSA 4933.98 0.25 Currencies Latest Daily % change Brazil real 4.7214 -0.72 Mexico peso 19.9720 -1.00 Chile peso 815.7 -1.21 (Reporting by Susan Mathew in Bengaluru; Editing by Alistair Bell)
