* Turkey holds rates, lira weakens against dollar

* MSCI stocks, FX indices firm

* Russian rouble firms in Moscow

* Sri Lanka signs $1 bln credit line with India

March 17 (Reuters) - The Turkish lira deepened losses on Thursday after the central bank held rates despite soaring inflation, while broader emerging market stocks and currencies extended a rally after the U.S. Federal Reserve's policy decision offered no surprises.

The lira was 0.9% weaker at 14.78 against the dollar after the central bank kept its key rate steady at 14% for the third month in a row, sticking to President Tayyip Erdogan's unorthodox policy plan despite fallout from the Ukraine war that has lifted energy costs.

The currency was at 14.69 a dollar ahead of the decision.

"Clearly, policymakers in Turkey - and in particular President Erdogan - ... remained wedded to the 'new economic model' of low interest rates and a weak lira," said Jason Tuvey, senior EM economist at Capital Economics.

"If anything, we suspect that the next move in rates is more likely to be down than up."

The lira has weakened about 9% so far this year after plunging 44% last year thanks to 500 basis points of rate cuts as Erdogan sought stimulus despite soaring inflation which now stands at over 50%.

The move comes after the U.S. Fed on Wednesday raised the policy rate by a quarter point, as expected, and telegraphed equivalent hikes at every remaining meeting this year to combat inflation.

Taiwan's central bank surprised with a 25 basis points hike, following the Fed's move, while Indonesia kept the benchmark borrowing rate on hold in line with expectations.

Tensions about the Ukraine war remain high but investors took some encouragement from ceasefire talks, although there has been no sign of a deal yet. Comments from Chinese officials pledging stimulus measures for China's wobbly economy also kept risk appetite buoyed.

MSCI's EM stocks index was up 3.8% after leaping 5.3% on Wednesday, while its currencies counterpart added 0.5% as the dollar fell.

Russia's rouble firmed in Moscow trading, while it was choppy in the offshore market. But it traded around 105 per dollar in both markets.

Investors await news on Russia's sovereign debt coupon payment, which were due on Wednesday. The Kremlin said Russia had the funds necessary to service its foreign bonds so it said any default would be artificial.

Sri Lankan government bonds, which have slumped in the last two years, rose as much as 3.5 cents, or nearly 7%, after the country signed a $1 billion credit line with India to help ease crippling shortages of essential items.

They have already jumped more than 20% over the last week after it emerged long-resisted talks with the International Monetary Fund about a support programme had begun.

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 Anisha Sircar and Susan Mathew in Bengaluru; Editing by Emelia Sithole-Matarise and Edmund Blair)