* Rand down 0.2%, lira, rouble flat
* C.bank meetings in Russia, S. Africa, Turkey, Hungary this week
* WHO reports record rise in daily COVID-19 cases
* EU recovery fund talks in progress
By Susan Mathew
July 20 (Reuters) - Most emerging market currencies made small moves on Monday as surging number of coronavirus cases kept risk appetite muted ahead of a slew of emerging market central bank meetings this week, with focus also on a European recovery fund plan.
South Africa’s rand fell 0.2% against the dollar after marking its fourth straight week in the red on Friday, while Russia’s rouble struggled to hold gains as oil prices declined.
Turkey’s lira was flat. The country’s central bank raised reserve requirement ratios on forex deposits for all banks by 300 basis points on Saturday, as part of the normalization process following measures taken to counter the economic impact of the coronavirus crisis.
The bank is expected to continue to hold its key interest rate steady this week, while counterparts in South Africa and Russia are seen cutting their rates, according to polls conducted by Reuters.
The dollar steadied as the euro jumped after European leaders said progress was being made in talks about the 750-billion-euro recovery fund to support economies in the wake of a pandemic induced lull. But emerging market currencies failed to capitalize as pandemic caution prevailed.
The World Health Organization reported a record increase in coronavirus cases for the second day in a row on Saturday, with the total rising by 259,848 in 24 hours. According to a Reuters tally, more than 14 million people have been infected globally so far, and nearly 602,000 have died.
“In the absence of any drivers from weekend news and a quiet data calendar, COVID-19 has shifted back to front and centre in currency traders’ minds,” said Jeffrey Halley, senior market analyst, Asia Pacific at OANDA.
Emerging markets had rallied sharply since year lows in March on stimulus support, vaccine hopes and gradual restart of economic activities, but the recovery could lose momentum if containment measures continue into the second half of the year. Hungary’s forint firmed 0.2% with the central bank expected to cut rates by 15 basis points to 0.6% on Tuesday. Credit Suisse analysts await details of an expected revision of the structure of the bank’s policy rate.
Among stocks, MSCI’s index of developing market stocks rose 0.2%, as heavy-weight mainland China stocks jumped as regulators signalled support for market.
But the rally seemed not to have a far reach as some Asian bourses as well as main indexes of South Africa, Russia and Saudi Arabia declined.
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For RUSSIAN market report, see (Reporting by Susan Mathew in Bengaluru; Editing by Rashmi Aich)