By Claire Milhench

LONDON, March 24 (Reuters) - Emerging stocks paused on Friday ahead of a vote on a key U.S. reform that may pave the way for stimulative tax cuts, whilst the Russian rouble firmed ahead of a central bank meeting at which interest rates are expected to stay on hold was set to hold

MSCI's benchmark emerging stocks index end the week marginally in the black. Investors are awaiting a U.S. healthcare bill vote seen as a litmus test of whether President Donald Trump can muster the backing to implement his promised tax cuts and spending plans.

"I don't think EM is going to collapse from here but I wouldn't rule out a 3-5 percent pullback in early Q2," said Tim Love, investment director for emerging market equities at GAM.

"There has been a very hard fall in the positive carry trades - Brazil, Russia, Indonesia - so the question is whether you go back in or think there is another leg down here."

The Russian rouble firmed 0.2 percent ahead of a central bank meeting at which 15 out of 25 analysts polled by Reuters expect it to hold rates at 10 percent. Local bonds were little changed.

However, the chances of a 25 basis point rate cut have grown as inflation has fallen to 4.6 percent, which is close to the bank's 4 percent target.

Russian officials have stepped up verbal interventions in recent days claiming the rouble is overvalued. It has firmed 6.7 percent so far this year to 57.4 per dollar.

Love suggested the authorities would like to see the rouble back at the mid-60 per dollar level: "I certainly don't think it is going to spook them if it got a bit weaker from here."

Russian bond yields slipped slightly but are off three-year lows hit last week.

Elsewhere Chinese mainland shares rose 0.8 percent to 3-1/2 month highs. Indian shares gained 0.4 percent after the finance minister said the government would soon announce new measures to tackle non-performing assets.

Czech shares outperformed in Europe, up 0.2 percent after consumer confidence rose in March.

The Czech crown's implied euro rate in the three-month forward market continued to retreat from the multi-year highs it hit earlier this week.

The Turkish lira firmed 0.3 percent but the South African rand lost 0.2 percent against the dollar, off a 20-month high hit on Thursday.

Meanwhile, Nigeria's naira was trading at 347 per dollar in the six-month non-deliverable forwards market, its firmest in six weeks, having touched almost 400 per dollar a month ago.

The Nigerian central bank has been intervening in the foreign exchange market to narrow the gap between the official and parallel market rates.




on year

Morgan Stanley Emrg Mkt Indx 967.73 -0.19 -0.02 +12.23

Czech Rep 983.62 +2.86 +0.29 +6.73

Poland 2237.91 +2.58 +0.12 +14.89

Hungary 32188.29 +60.40 +0.19 +0.58

Romania 7981.43 +19.90 +0.25 +12.65

Greece 634.93 -5.27 -0.82 -1.35

Russia 1119.63 -4.72 -0.42 -2.84

South Africa 44846.66 +1.43 +0.00 +2.15

Turkey 89933.87 +169.76 +0.19 +15.10

China 3268.93 +20.38 +0.63 +5.33

India 29493.54 +161.38 +0.55 +10.77



Currencies Latest Prev Local Local



close currency currency



% change % change



in 2017

Czech Rep 27.02 27.02 -0.00 -0.04

Poland 4.27 4.26 -0.07 +3.21

Hungary 309.39 309.03 -0.12 -0.18

Romania 4.55 4.55 +0.00 -0.40

Serbia 123.92 123.85 -0.06 -0.46

Russia 57.39 57.43 +0.07 +6.76

Kazakhstan 316.59 315.48 -0.35 +5.39

Ukraine 27.10 27.07 -0.11 -0.37

South Africa 12.46 12.44 -0.12 +10.25

Kenya 102.90 102.90 +0.00 -0.52

Israel 3.65 3.65 +0.11 +5.63

Turkey 3.62 3.63 +0.29 -2.66

China 6.89 6.88 -0.04 +0.81

India 65.44 65.43 -0.02 +3.82

Brazil 3.14 3.14 -0.04 +3.61

Mexico 18.95 18.93 -0.11 +9.34



Debt Index Strip Spd Chg %Rtn Index

Sov'gn Debt EMBIG 329 0 .01 7 66.93 1

(Additional reporting by Marc Jones; Editing by Hugh Lawson) ((claire.milhench@thomsonreuters.com; +44)(0)(207 542 3571; Reuters Messaging: claire.milhench.thomsonreuters.com@reuters.net))