Emerging market assets rebound after sharp falls, ruble slides on oil ban

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March 9 – Most emerging market currencies and stocks rebounded on Wednesday after sharp falls amid the Ukraine crisis and fears of rising inflationary pressures, while the Russian ruble fell as the United States imposed a ban on oil imports.

US President Joe Biden on Tuesday imposed an immediate ban on imports of oil and other Russian energy in retaliation for Russia’s invasion of Ukraine.

The ruble fell more than 15% in Moscow as local trading resumed for the first time this week, while its interbank rate fell more than 5% at 0926 GMT.

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In its latest move to ease pressure on the rouble, Russia’s central bank said on Tuesday that citizens with foreign currency accounts would not be allowed to withdraw more than $10,000 in total over the next six months. Last week, the bank reduced the commission for buying foreign currency through brokers to 12%.

“The ruble remains under pressure, as all the new controls on currency transactions alienate the domestic and global exchange rate,” said Alex Kuptsikevich, senior financial analyst at FxPro, adding that Russia’s economic landslide continues. at extreme speed.

Fitch downgraded Russia’s sovereign rating another six notches into junk territory on Tuesday.

The sanctions not only triggered higher commodity prices, but generated more margin calls in trading companies, raising fears of spillovers to the wider financial world and increasing global inflationary pressures.

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Still, assets in some commodity-rich countries benefited from the rise. The South African rand, Brazilian real and Colombian peso were all expected to rise for the week.

The rand gained 0.7% on a rise in the price of gold, although gains were limited by deeper power outages by local utility Eskom and war-related concerns.

The MSCI index of emerging market stocks rose 0.5%, for the first time in four days, while its currency counterpart added 0.2%.

The currencies of major oil importers like the Turkish lira, Hungarian forint and Polish zloty have lost more than 5% each since the Russian invasion.

War concerns also prompted foreign investors to sell around $1.19 billion worth of Egyptian treasury bills in just three days, with JPMorgan saying on Tuesday that a sharp devaluation of the Egyptian pound was likely needed and would may need more help from the International Monetary Fund. EG207984663=>

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“In other emerging markets, there is concern or even pessimism about the medium-term outlook, but some relative easing in the level of fear is striking in equity markets today,” Kuptsikevich added.

For 2022 Emerging Markets FX performance chart see http://tmsnrt.rs/2egbfVh For 2022 MSCI Emerging Market Index performance chart see https://tmsnrt.rs/2egbfVh

For TOP NEWS in emerging markets

For the CENTRAL EUROPE market report, see

For the TURKISH market report, see

For the RUSSIAN market report, see (Reporting by Shreyashi Sanyal and Anisha Sircar in Bengaluru; Editing by Krishna Chandra Eluri)

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