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EM stocks down 0.4% on day, FX down 0.2%

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Putin signals tax hikes to close Russia's budget gap

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S. Africa's minister meets USTR Greer for trade talks

By Pranav Kashyap

Sept 19 (Reuters) - Emerging market stocks and

currencies were on track for modest weekly gains as investors

caught their breath after a whirlwind week packed with central

bank decisions and key economic releases.

An index tracking emerging market equities was on

course for a nearly 1% weekly gain - its third straight advance

and longest winning streak in more than four months. A similar

gauge for currencies was also headed for a

modest uptick.

On the day, they were down 0.4% and 0.2% respectively.

In Central and Eastern Europe, Polish stocks and

the zloty were steady, with investors keeping an eye

on Moody's credit rating review due later in the day.

Poland is grappling with ballooning spending demands,

especially a rise in defence outlays following Russia's invasion

of neighbouring Ukraine. The government recently raised its 2025

fiscal deficit forecast to 6.9% of GDP - more than double the

EU's 3% threshold, making it the second-highest deficit in the

bloc.

Rating agencies have flagged deep political polarization as

a key risk to fiscal consolidation. Fitch recently revised its

outlook to negative, citing concerns that entrenched divisions

could derail efforts to rein in spending - a move that could

pave the way for a downgrade.

"Poland's fiscal trajectory is slightly negative, but they

have the EU support and still have a strong starting point from

a credit perspective," Thomas Christiansen, CIO and head of EMD

at UBP, said.

The Hungarian forint continued to hover near

16-month highs. On a broader front, an index tracking the

region's equities dropped 0.4%.

This week, investor optimism got a reality check after the

Federal Reserve delivered a 25-basis-point rate cut, but paired

it with a dose of caution.

The steady rally in emerging markets lost momentum as Fed

Chair Jerome Powell signalled Wednesday's move was more about

risk management than the start of a full-blown easing cycle -

leaving investors guessing about the pace and direction of

future rate cuts.

The Russian rouble was steady after President

Vladimir Putin signalled on Thursday that he is open to raising

certain taxes, especially on the wealthy, as the government

struggles to make ends meet in the fourth year of the war in

Ukraine.

Turkish equities were on track for their best

weekly performance in nearly three months, snapping a three-week

losing streak - the longest in seven months.

The rebound was sparked by a court decision to delay a

ruling on whether to remove the main opposition leader over

alleged irregularities.

"We haven't considered Turkey to be a fully free and open

democracy, so more importantly for Turkish asset prices, in our

view, is the policy making. It's whether the monetary policy is

making sense and there's been serious improvements on that

front," Christiansen added.

Elsewhere, South Africa's rand hovered near 10-month

highs, while stocks in Johannesburg edged up 0.2% after

the country' trade minister met U.S. Trade Representative

Jamieson Greer for talks as Africa's biggest economy tries to

agree a deal to roll back steep U.S. tariffs.

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see