Turkish lira drops another 1%; FX set for third weekly loss

* Turkish lira nears record lows

* South African rand gives up strong Thursday gains

* China Evergrande jitters dent emerging market stocks

* Turkey stocks slip as manufacturing confidence falls

By Sagarika Jaisinghani

Sept 24 (Reuters) - The Turkish lira fell to near record lows on Friday, a day after a surprise rate cut from the central bank, while broader emerging markets currencies headed for their third straight weekly loss on jitters from the China Evergrande crisis.

The lira TRY= was down nearly 1% at 8.855 to the dollar by 0747 GMT, hitting its weakest level since June 2.

The currency, down nearly 16% this year, is among the worst performers in emerging markets, with Turkey's heavy foreign debt and the independence of its central bank seen as the main concerns for investors.

On Thursday, the central bank was widely expected to hold interest rates steady at 19%, but instead delivered stimulus long sought by President Tayyip Erdogan and sent the lira sinking 1%.

"The example of the previous rate-cutting cycle (in 2019) tells us that USD-TRY risks (could be) going exponential at some point in coming months," Commerzbank FX analyst Tatha Ghose wrote in a note.

"We hold a symbolic 10.00 forecast for the exchange rate, not in a fundamental fair-value sense, but as a warning to our readers about the magnitude of potential depreciation risk they face from this non-transparent, inconsistent monetary policy."

Turkish stocks .XU100 dropped 0.6% as data showed business confidence among manufacturers fell in September from the previous month.

The emerging markets currencies index .MIEM00000CUS fell 0.2%, tracking weakness in Asian markets on uncertainty around the fate of debt-ridden China Evergrande 3333.HK , which missed an interest payment deadline on Thursday and has entered a 30-day grace period.

Hong Kong shares .HSI were down more than 1% and tracking weekly declines of nearly 3%, with Evergrande shares shedding 11% on the day.

The South African rand ZAR= weakened 1%, although local markets were closed for a holiday. The currency had jumped in the previous session as the central bank held interest rates at a record low.

Russia's rouble RUB= also eased against the dollar and was on track for a subdued finish to the week.

The MSCI emerging market stock index .MSCIEF fell 0.5%, tracking its third straight weekly decline.

For GRAPHIC on emerging market FX performance in 2021, see Link For GRAPHIC on MSCI emerging index performance in 2021, see Link

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see

Emerging market currencies Link

Reporting by Sagarika Jaisinghani in Bengaluru; Editing by
Ramakrishnan M.

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.