EMERGING MARKETS-China's yuan sees biggest quarterly fall on record
LONDON, June 30 (Reuters) - China's yuan hit a six-month low and chalked up its biggest quarterly fall against the dollar on record on Thursday as Beijing suggested it was happy for the weakness to continue. Chinese sources told Reuters the People's Bank of China (PBOC), China's central bank, was willing to let the yuan fall to 6.8 per dollar over the rest of the year, to support the world's No. 2 economy. The currency, trading at 6.6 per dollar by 0950 GMT, is down roughly 3 percent since March and if falls as far as suggested, 2016 could mirror last year's record 4.5 percent drop. "The central bank is willing to see yuan depreciation, as long as depreciation expectations are under control," a government economist, who requested anonymity, said. The central bank responded, calling the report "inaccurate". Emerging markets (EM) were broadly higher on the day with stocks, bonds and many currencies showing a comfortable lead over developed market peers at the year's half way mark. MSCI's main EM shares index was up 1 percent, 2.8 percent on the month and 4.5 percent for the year after some stellar performances in Latin America and Russia following an 85-percent rebound in oil prices since mid-January. Polish and Romanian markets remained subdued in the wake of last week's Brexit vote, though mostly the concerns appeared to have largely eased. Fund flow experts the Institute of International Finance (IIF) said the early signs showed the UK vote to quit the EU had had an no immediate impact on emerging market trading. It said daily EM portfolio flows data suggested outflows were a fairly minor $210 million on "Brexit Friday" and that for June as a whole foreign investors had pumped a net $16.7 billion into emerging market assets. "The markets seem to have shrugged off the Brexit concerns quite comfortably," TD Securities strategist Paul Fage said. "We have now put out recommendations to buy the currencies that have fallen but actually have very little linkage to the UK." In Asia, a widely expected move saw Taiwan trim its interest rates for the fourth consecutive meeting in a bid to shore up flagging growth. The 0.125 percentage point cut, took rates to 1.375 percent, a level last seen in mid-2010. The Czech Republic and Romania are likely to keep their rates steady later, but Mexico could hike its rates to relieve some of the recent upward pressure on the peso. "The consensus is for a 25 basis point hike in Mexico but we are in the minority that think they will stay on hold. We think the pressure on the peso has probably eased enough for them," Fage said. Emerging Markets Prices from Reuters Equities Latest Net Chg % Chg % Chg on year Morgan Stanley Emrg Mkt Indx 831.16 +9.34 +1.14 +4.66 Czech Rep 813.87 +5.66 +0.70 -14.90 Poland 1752.89 -3.31 -0.19 -5.72 Hungary 26526.10 +142.78 +0.54 +10.89 Romania 6493.89 -9.82 -0.15 -7.29 Greece 540.96 -0.92 -0.17 -14.32 Russia 931.71 +0.36 +0.04 +23.07 South Africa 46177.05 +444.59 +0.97 +0.83 Turkey 77056.94 +344.96 +0.45 +7.43 China 2929.61 -1.99 -0.07 -17.22 India 27036.00 +295.61 +1.11 +3.52 Currencies Latest Prev Local Local close currency currency % change % change in 2016 Czech Rep 27.09 27.10 +0.01 -0.35 Poland 4.43 4.42 -0.21 -3.84 Hungary 316.33 316.78 +0.14 -0.53 Romania 4.52 4.52 +0.10 +0.01 Serbia 123.16 123.25 +0.07 -1.37 Russia 64.04 63.67 -0.58 +13.91 Kazakhstan 339.06 338.96 -0.03 +0.42 Ukraine 24.80 24.90 +0.40 -3.42 South Africa 14.74 14.78 +0.32 +4.91 Kenya 100.92 101.00 +0.08 +1.27 Israel 3.84 3.85 +0.14 +1.12 Turkey 2.88 2.89 +0.20 +1.19 China 6.65 6.64 -0.17 -2.32 India 67.52 67.41 -0.16 -1.96 Brazil 3.25 3.22 -0.74 +22.00 Mexico 18.50 18.48 -0.15 -7.21 Debt Index Strip Spd Chg %Rtn Index Sov'gn Debt EMBIG 403 -5 .06 7 42.37 1 All data taken from Reuters at #N/A The record could not be found GMT. Currency percent change calculated from the daily U.S. close at 2130 GMT. For GRAPHIC on emerging market FX performance 2016, see link.reuters.com/jus35t For GRAPHIC on MSCI emerging index performance 2016, see link.reuters.com/weh36s For GRAPHIC on MSCI emerging Europe performance 2016, see link.reuters.com/jun28s For GRAPHIC on MSCI frontier index performance 2016, see link.reuters.com/zyh97s For CENTRAL EUROPE market report, see For TURKISH market report, see For RUSSIAN market report, see ) (Editing by Louise Ireland)
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