* MSCI EM stocks up 0.9%, FX up 0.2%

* Brent Crude slips more than 7%

* Bank Indonesia Governor steps down

* U.S. inflation, Fed rate call later this week

By Utkarsh Hathi

July 27 (Reuters) - Most emerging market stocks rose on

Monday, as global risk appetite improved after oil prices slid

due to a pause in U.S.-Iran strikes in the Middle East, while

currencies were mixed against the dollar.

Oil prices slumped more than 7% after U.S. and Iran paused

attacks in the Gulf region over the weekend, raising hopes for a

diplomatic solution that would allow shipping to resume in the

Strait of Hormuz.

Lower crude prices offered relief to investors after a more

than 25% surge in Brent crude over the previous two weeks, which

reignited worries about inflation and central banks adopting a

hawkish stance.

The U.S. Federal Reserve's policy decision is due later this

week. While higher energy prices had prompted some bets on a

more hawkish outlook, BofA Global Research analysts said they

still expect the Fed to remain on hold in July, albeit with the

decision becoming a closer call because of oil-driven inflation

risks.

COMMITMENT TO STABILITY

Meanwhile in Asia, the Bank Indonesia's governor stepped

down in a surprise move that raised concerns about the

independence of the central bank, which has been under pressure

to support President Prabowo Subianto's big-growth agenda.

"Markets had started to gain confidence that BI was

successfully balancing support for growth with its commitment to

currency and macroeconomic stability. The key question now is

whether this balance will be maintained under new leadership,"

said Deepali Bhargava, regional head of research, Asia-Pacific

at ING.

The Indonesian rupiah fell as much as 0.4% against

the dollar.

MSCI's global EM currencies index rose 0.2%

, while the equities gauge advanced 0.9%.

South Korean shares recovered and rose 1% after a

nearly 6% drop in the previous session, with chipmakers Samsung

Electronics ( SSNLF ) and SK Hynix ( SKHY ) gaining ahead

of their results later this week.

Taiwan's tech-heavy benchmark was flat, while

Chinese equities gained 1.2%.

MSCI's index tracking emerging Europe gained

0.9%, with most regional benchmarks gaining more than 0.5%,

except Romania's which declined 0.3%.

Investors are also awaiting a slew of inflation readings

from the emerging market countries this week, which could

provide clues for central banks' monetary policy path.

Asian currencies were mixed, with India's rupee

reaching a two-week high as oil prices slipped, while traders

also cited roughly $1.5 billion to $3 billion intervention from

the central bank.

South Africa's rand gained 0.7% after its steepest

weekly drop in four months on Friday, triggered by a surprise

dovish stance from its central bank, while the Egyptian pound

advanced 1.3%, heading for its biggest single-day jump in

more than a month.

Emerging Europe currencies were subdued against the euro,

with only the Hungarian forint edging 0.3% higher.

The Turkish lira was flat.

Elsewhere, Bahrain's 5-year CDS tightened 12 basis points to

304 bps.

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