* Russian stocks mark worst quarter since Dec 2008
* Latam currencies clock best quarter ever
* EMFX muted against steady dollar
March 31 (Reuters) - Most emerging market currencies were hemmed into a range on Thursday as the dollar steadied, while Russian stocks marked their worst quarterly decline in more than 13 years as the country's war on Ukraine wreaked havoc on financial markets.
Russia's dollar-denominated RTS index has fallen almost 38% this quarter, while the rouble-denominated index plunged nearly 31% in the same period.
Both indexes marked their worst quarterly performance since December 2008 due to heavy Western sanctions aimed at isolating Russia's economy in retaliation for its invasion of Ukraine.
However, stock trading has picked up gradually as some curbs on short selling were lifted on Thursday.
The rouble firmed to 83 against the dollar, hovering near pre-war levels. The currency lost nearly half its value in the immediate aftermath of the war, but tight capital controls and central bank interventions since then have limited losses to a 11.5% decline for the year.
The first quarter of 2022 was expected to have setbacks from rising inflation, tighter monetary policy and high energy prices, with analysts pointing to the Russia-Ukraine war exacerbating those worries.
"The emerging market outlook will gradually normalise, albeit it remains challenging," said Guillaume Tresca, senior emerging market strategist at Generali, adding that "valuations have cheapened".
Emerging market currencies have managed to stay afloat, with the MSCI's gauge adding 0.6%. However, units of exporter-heavy countries in Latin America performed far better.
The MSCI's index tracking Latam currencies bagged a quarterly gain of 14%, their best quarter on record, boosted by rising prices of commodities such as oil, raw materials and industrial metals.
Generali's Tresca also added that the Latin America and Asia regions were the least vulnerable to any spillovers from the war.
South Africa's rand edged higher on Thursday and has emerged as one of the top beneficiaries of higher gold prices, with gains of more than 10% for the quarter, making it its best showing since December 2020.
Currencies of importers, especially those of oil, suffered hefty declines. The Indian rupee, was on course for its worst quarterly drop since the first quarter of 2020, while Turkey's lira shed more than 9% during the same period.
For GRAPHIC on emerging market FX performance in 2022, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2022, see https://tmsnrt.rs/2OusNdX
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(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Amy Caren Daniel)
