*

Egypt raises interest rates by 600 bps

*

Fed chair Powell's testimony awaited

*

Poland rate decision on tap

*

Stocks up 0.6%, currencies flat

By Shashwat Chauhan

March 6 (Reuters) - A gauge of emerging market stocks

inched higher on Wednesday as heavyweight Hong Kong recouped

some losses, while the Egyptian pound sank after its central

bank said it would let the currency trade freely.

Egypt's international bonds jumped by more than 2 cents

after its central bank said it had hiked interest rates by 600

basis points at an unscheduled meeting and would let the pound

trade freely in an apparent move to restore economic stability

with the help of Gulf investment inflows.

The Egyptian pound tumbled more than 53.7%, last at

47.4 per dollar.

"The central bank's decision to allow the market to

determine the exchange rate is a pivotal move towards unifying

the nation's exchange rates ... it also aligns with the IMF's

recommendations, a prerequisite for financial assistance," Shaun

Murison, senior market analyst at IG said.

Last month, International Monetary Fund (IMF) Managing

Director Kristalina Georgieva had told Reuters that it has

resolved key issues with Egyptian authorities in a review of its

$3 billion loan programme and should finalise an augmented

financing package within weeks.

By 0929 GMT, MSCI's gauge for emerging market stocks

advanced 0.6%, after falling 1% on Tuesday.

Hong Kong shares closed 1.7% higher after falling

more than 2% in the previous session, while India's Nifty 50

advanced 0.5%.

A gauge of EM currencies was flat as caution

prevailed ahead of Federal Reserve Chair Jerome Powell's

congressional testimony later in the day.

The Czech crown weakened 0.2% against the euro,

while the Hungarian forint held steady at 393.27.

Hungary's economy is projected to grow by 2.4% this year,

weaker than the government forecast, and the outlook is subject

to significant risks, the Organisation for Economic Co-operation

and Development (OECD) stated.

Poland's zloty depreciated 0.1% against the euro

ahead of its central bank's decision on interest rates later in

the day, which is widely expected to hold rates at 5.75%.

Stocks in emerging Europe were mixed, with Poland's WIG 20

up 0.2%, while Turkish shares dipped 0.2%.

South Africa's rand appreciated 0.5% against the

dollar, its fifth straight day of gains as gold prices, the

country's top export, hovered close to record high levels

breached on Tuesday.

HIGHLIGHTS

** China to step up economic policy adjustments in 2024,

state planner says

** Turkey central bank moves to curb lending, FX demand to

bolster tight stance

** Hungarian retail sales struggle in January as recovery

falters

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see