EMERGING MARKETS-EM stocks snap 3-day winning streak; S.African rand briefs

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EM stocks down 1.2%, currencies slip 0.2%

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S.Africa inflation slows for second month in September

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Hungary cenbank offers quick deposit at 18% interest rate

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China’s yuan, stocks weaken in cautious mood during Congress

By Bansari Mayur Kamdar

Oct 19 (Reuters) – South Africa’s rand slipped on Wednesday against a strong greenback even as data showed consumer inflation slowed for a second month in a row in September, while emerging market stocks fell after three days of sharp gains.

The rand was down 0.3% against the dollar in early trading.

Data showed headline consumer inflation in September slowed to 7.5% year on year from 7.6% in August in South Africa.

“It came in largely as expected despite some calling for a positive surprise,” said Simon Harvey, head of FX analysis at Monex Europe. “For that reason, it has had a largely limited impact on the currency.”

Investors now awaited South Africa’s August retail sales numbers due later in the day, with economists predicting a 4.2% year-on-year rise after July’s 8.6% increase was boosted by base effects.

Overall, emerging market currencies slipped 0.2%, while stocks fell 1.2%.

China’s blue-chip CSI 300 Index closed down 1.6%, while the yuan weakened against the greenback, with traders cautiously awaiting the country’s delayed economic indicators and more clues on policy from the ongoing Communist Party Congress.

The Hungarian forint outperformed its central and eastern European peers, up 0.3% against the euro.

Hungary’s central bank said it will hold its quick deposit facility tender offered at a fixed 18% interest rate again on Wednesday.

The bank had launched the tenders to shore up the forint on Friday, when it unexpectedly ramped up interest rates and said it would provide foreign currency from its reserves to pay for Hungary’s surging energy imports.

Emerging markets have been consuming their stockpiles of foreign exchange reserves this year at a faster pace than in previous bouts of currency weakness as central banks fight to defend currencies against the mighty US dollar.

Other CEE currencies such as the Polish zloty and the Romanian leu slid, while the Czech crown was flat against the euro.

The Russian ruble edged lower against the dollar with domestic investors focused on two OFZ treasury bond auctions scheduled for later in the day.

The Turkish lira stood at 18.5890 against the dollar in early trade, compared with a close of 18.5840 on Tuesday. 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 Bansari Mayur Kamdar in Bengaluru)

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