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EM FX index down for sixth day

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Focus on Fed economic projection

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Lira hovers near record low

By Sruthi Shankar

March 19 (Reuters) - Most emerging market currencies and

stocks slipped on Tuesday as the dollar strengthened on

expectations that the U.S. Federal Reserve will keep borrowing

costs higher for longer.

The MSCI's EM stocks index fell 1% to a near

two-week low, with bourses in South Korea, Hong Kong

and India leading losses with a fall of

1% each.

Shanghai stocks shed 0.7% on worries over

the country's deepening property crisis and soft domestic

demand. China is widely expected to leave benchmark lending

rates unchanged on Wednesday.

The MSCI's EM currencies index fell for a

sixth day in a row as the dollar continued its recent climb.

Hotter-than-expected readings of the U.S. labour market and

inflation in recent weeks have led investors to rein in bets of

quick and large interest rate cuts from the Fed this year.

"This week's focus is on the Federal Reserve and the update

on the Summary of Economic Projections, which will show higher

growth and inflation for 2024," said Saxo Bank strategists.

"The question is whether such forecasts will be accompanied

by 75 bps of rate cuts this year. We see a higher probability of

U.S. Treasury yields ending the week higher, with 10-year yields

resuming their rise to 4.5%."

Rising U.S. interest rates tend to pull investors towards

healthier U.S. returns, in turn hurting emerging market assets.

The Turkish lira hovered near all-time lows at

32.34 per dollar ahead of a central bank meeting on Thursday.

Most economists polled by Reuters expect rates to be left

unchanged but see another hike later this year as inflation

remains elevated.

The South African rand touched a two-week low at

19.03 per dollar before easing to 18.97. Domestic inflation

data, due on Wednesday, is expected to show consumer prices

growing to 5.5% in February from 5.3% a month earlier.

Rating agency S&P Global Ratings revised Egypt's outlook to

"positive" citing "extensive external support program" while

affirming a B-/B credit rating.

The World Bank Group said on Monday it intends to provide

more than $6 billion of support over the coming three years to

support Egypt's faltering economy.

HIGHLIGHTS:

** Armenia's PM says he must return disputed areas to

Azerbaijan or face war -TASS

** Turkish cenbank net reserves dropped some $1.2 bln last

week, bankers say

** Indonesia proposes injecting $3.7 bln into state firms in

2024, 2025, minister says

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For RUSSIAN market report, see