EMERGING MARKETS-Turkey's lira eyes second week of gains, EMEA stocks rise
* Russia's Ruble is preparing for a third session in a row
* S.African Rand Flat prior to credit checks
* The Turkish lira is pulling back from nearly two month highs
By Shriya Ramakrishnan and Shreyashi Sanyal
Nov. 20 (Reuters) - The Turkish lira eased on Friday but was still on its way for a second straight week after the central bank hiked its key rate and promised to keep inflation stiff while the South African rand remained stable before the credit checks.
The lira fell 0.6% against the dollar around 0858 GMT to 7.5959 as profit taking hit a nearly two-month high the day after the currency jumped to a nearly two-month high. For the week, the currency should see nearly 1% gain after rising 11% last week.
The Turkish central bank met market expectations on Thursday by raising its key interest rate by 475 basis points to 15% and pledging to continue tightening monetary policy until a "permanent decline" in inflation is achieved.
The rate hike, the sharpest in more than two years, could hold back the economic recovery from the coronavirus pandemic, but it could also support the lira after falling to record lows this year on concerns over dwindling foreign exchange reserves and double-digit inflation.
"I assume that the lira will not recover as much now, but will stabilize in the 7.50 to 7.60 range against the dollar over the next few months ... for someone looking for a bit of carry, that will remain Lira still very attractive, "said Per Hammarlund, SEB's chief emerging markets strategist.
South Africa's rand swung between flat and negative territory before Moody's and S&P expected the credit checks later that day.
RBC Europe analysts warned of the risk of Moody's downgrading after the rating agency commented on the budget speech by South African Finance Minister Tito Mboweni last month.
Moody's had warned that the South African budget lacks details of how and when the government will implement measures to stimulate economic growth, so that national debt is likely to keep rising for years.
Russia's ruble rose 0.4% in line with the strength of global crude oil prices, the country's main export.
Emerging market stocks also performed slightly better, with the MSCI stock index gaining 0.4%.
BofA said Friday that inflows into global stocks rose to $ 71.4 billion in the past two weeks, led by stocks from the US and emerging markets as COVID-19 vaccines advance development into one euphoric buying of stocks.
In Central Europe, Budapest stocks rose more than 1% after the Hungarian Prime Minister announced that a dispute over the recovery fund and the European Union budget would eventually be settled.
For information on the GAP performance of emerging markets in 2020, please visit http://tmsnrt.rs/2egbfVh. GRAPHIC on the performance of MSCI threshold indices in 2020 can be found at https://tmsnrt.rs/2OusNdX
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For a Russian market report see (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Subhranshu Sahu)
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