Emerging markets stocks and FX ease as investors await central bank decisions

3% By Johann M Cherian Oct 7 (Reuters) — Emerging market assets edged lower on Wednesday as investors awaited a string of central bank policy decisions, with policymakers weighing persistent Middle East tensions that pushed oil prices back toward the $101-a-barrel mark. 9%, while its emerging market currencies gauge was flat. 5%, respectively, while Turkey's lira was pinned at a record low. Central banks in Poland and Kenya are expected to unveil interest rate decisions later in the day, weeks after the US Federal Reserve lifted borrowing costs for the first time in three years.

Polish and Kenyan policymakers were in a monetary policy easing cycle till the US-Israeli war with Iran began in late February and have held interest rates since,waiting to gauge the conflict's inflationary impact. Economists polled expect both to leave borrowing costs unchanged on Wednesday. 0%, exceeding the tolerance band, new government measures and lower core inflation should allow the (Polish) central bank to continue waiting," said Frantisek Taborsky, an EMEA FX & fixed income strategist at ING. 37 per euro and has been trading in a tight range over the past two weeks afterhitting its lowest since January 2024.

Kenya's shilling traded steadyat 12 per dollar. 5%, its first increasesince 2023, responding to mounting inflation and strong economic growth. 3% to 96 per dollar, while stocks declined. Debt Worries Mount Sovereign indebtedness will be a major focus during next week's International Monetary Fund meetings in Bangkok at a time when global yields are rising.

Senegal for example, has an estimated $13 billion of misreported debt. An agreement in principle with its official lenders and bondholders is expected by December, three sources told Reuters on Tuesday. The West African country's hard currency bonds traded little changed. Meanwhile the IMF said a staff visit to Malawi could potentially unlock a new lending programme, while also reaching a staff-level agreement with Papua New Guinea that would unlock up to $189 million.

In a broader effort, the Rockefeller Foundation proposed an initiativeto provide affordable financing to countries struggling with high debt to prevent them from using low-interest multilateral loans to clear obligations to bilateral creditors like China. 1% earlier this year, citing stronger performance across the continent. Investors also monitored developments in Turkey, where the benchmark stock index was down about 1%. The country's central bank governor cited data to show there'sno risk of contagion from a recent crisis involving some investment funds.

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