* EM FX slides again as dollar firm
* Romania raises rates by 100 bps to 4.75%
* Lira extends declines as policy concerns revive
July 6 (Reuters) - Emerging market currencies continued
their descent on Wednesday as investors sought refuge in
perceived safer assets on fears of a global recession, while
awaiting clues on the path of U.S. interest rates.
The Turkish lira slid towards June lows, last
down 1.3% at 17.24, while South Africa's rand, also
down over 1%, hit fresh 2020 lows.
Eastern European currencies extended sharp losses from the
previous session when the euro hit a two-decade low on worries
about soaring energy prices after a strike in the Norwegian oil
and gas sector and a dip in flows of Russian gas to Europe.
The Hungarian forint tumbled to a record low
versus the euro at 411 and the Polish zloty slid 0.8%
"The selling pressure on various EM currencies prevails due
to the market concerns that the global economy could be heading
for recession caused by historically high inflation," said Piotr
Matys, senior FX analyst at In Touch Capital Markets in London.
"The dollar is the ultimate safe haven and is benefiting
from its status."
Minutes of the Federal Reserve's June meeting, where the
U.S. central bank raised interest rates by 75 basis points, are
due later in the day.
Worries about harsh U.S. rate hikes causing a recession have
hit global financial markets this year, with riskier assets such
as cryptocurrencies, stocks and emerging markets assets taking a
"Emerging markets will remain under selling pressure in the
short-term horizons until the Fed explicitly says that they are
approaching the end of a tightening cycle," added Matys.
The Romanian leu, tightly controlled by the central
bank, was little changed versus the euro after the central bank
lifted its benchmark interest rate by a more-than-expected one
percentage point to 4.75%.
The hike, its seventh since October, still leaves Romania
lagging behind its central European peers, who have sharply
raised rates in the last year to combat surging inflation.
Poland's central bank is expected to hike rates by 75 basis
points to 6.75% on Thursday.
Most stock markets in Asia were lower, pulling the MSCI EM
equities index down 0.9% to its lowest since June
2020. However, stock markets in emerging Europe rebounded along
with wider euro zone stocks.
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
For TOP NEWS across emerging markets
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see
(Reporting by Devik Jain in Bengaluru; Editing by Krishna