EM stocks down 0.6%, with Hong Kong shares near two-week lows
Hungary rate decision at 1300 GMT, expected to hold at 6.5%
Indonesia's rupiah touches lowest since 1998
By Shashwat Chauhan
March 25 (Reuters) - Most emerging market currencies traded in a flat-to-lower band on Tuesday, as investors exercised caution and looked out for more developments on the tariff front, with stocks also range-bound.
U.S. President Donald Trump said on Monday automobile tariffs were coming soon even as he indicated that not all of his threatened levies would be imposed on April 2 and some countries may get breaks.
Bloomberg and the Wall Street Journal had reported earlier on Monday that the administration was narrowing its approach to the broad batch of levies Trump has been saying for weeks would be imposed on April 2, and could delay sector-specific tariffs.
"Our base case remains that while the Trump administration will be aggressive on tariffs, this will stop short of measures that would lead to a renewed period of elevated inflation or push the U.S. economy into recession," said Mark Haefele, chief investment officer at UBS Global Wealth Management in a note.
MSCI's index for emerging market stocks .MSCIEF dipped 0.6%, with heavyweight Hong Kong .HSI shares seeing sharp declines, down 2.4% to a near two-week low.
Turkish assets were broadly stable following a sharp drop last week. Markets were roiled after police detained Mayor Ekrem Imamoglu, President Tayyip Erdogan's main political rival and jailed him on Sunday.
The lira TRYTOM=D3 was last at 37.99 after hitting a record low of 42 last week, while local stocks .XU100 rose 2.6%, though off almost 12% from levels seen at the start of last week.
Turkish Finance Minister Mehmet Simsek and Central Bank Governor Fatih Karahan will hold a teleconference call with international investors on Tuesday, the Treasury said.
Hungary's forint EURHUF= weakened 0.4% against the euro in lead-up to new central bank Governor Mihaly Varga's first policy meeting later in the day, with expectations of the bank holding rates steady at 6.5% - the European Union's joint-highest level.
The Czech National Bank $(CNB.AU)$ is also likely to keep its main lending rate steady at 3.75% on Wednesday.
South Africa's rand ZAR= was stable, trading at around 18.25 per dollar, while Russia's rouble RUB= slipped 0.8% in over-the-counter trade.
Eyes would be on any talks of a peace deal between Russia and Ukraine, with Ukrainian and U.S. delegations scheduled to meet on Tuesday in Saudi Arabia following Russia-U.S. talks there a day earlier on a limited Black Sea ceasefire proposal.
Most EM currencies have gained ground against the greenback in 2025, as the case of U.S. exceptionalism weakened amid the tariff uncertainty, while fears of an impending economic slowdown also spurred some dollar weakness.
The forint HUF= and Brazil's real BRL= stand as the best performing EM currencies against the dollar so far this year, while Turkey's lira and the Indonesian rupiah IDR= are the worst performing.
The rupiah briefly hit its lowest level since the Asian financial crisis back in June 1998, prompting Indonesia's central bank to intervene in the currency market to defend it.
EM stocks have also benefited lately, with MSCI's index currently up nearly 5% year-to-date, boosted by a recovery in Chinese and Indian shares.
HIGHLIGHTS:
** India eyes tariff cut on $23 bln of US imports, to shield $66 bln in exports, sources say
** Pakistan's March inflation likely to stay in 1-1.5% range, finance ministry says
For TOP NEWS across emerging markets nTOPEMRG
For CENTRAL EUROPE market report, see CEE/
For TURKISH market report, see .IS
For RUSSIAN market report, see RU/RUB
(Reporting by Shashwat Chauhan in BengaluruEditing by Ros Russell)
((Shashwat.Chauhan@thomsonreuters.com;))
Comments