* Turkish lira hits new low, among worst EM performers this week
* Russian rouble trades around 3-month highs
* Chinese property stocks, bonds gain
By Ambar Warrick
Oct 22 (Reuters) - Most emerging market stocks and currencies rose on Friday, after a report said that debt-ridden developer China Evergrande Group had made some headway in interest payments, while Russia's rouble rose ahead of an interest rate decision.
However, most EM assets were also set for mild weekly gains amid growing expectations that central banks would act to stave off rising inflation.
MSCI's index of EM stocks rose 0.2%, while currencies added 0.1%.
Shares of China Evergrande rose 4.7%, with dollar-denominated bonds of property developers rallying after Reuters reported that the embattled real estate firm had supplied funds to pay interest on a U.S. dollar bond.
The news helped clear some fears of an imminent default in China's massive property sector, which investors fear could spill over to debt markets across the globe. Analysts speculated whether the bond payment was merely delaying an inevitable default.
The Chinese yuan gained slightly on the news.
Russia's rouble rose 0.2% to around three-month highs against the dollar, as markets expected the central bank to raise rates from 6.75%.
Rising inflation is expected to force the bank's hand, although analysts were split over a 25 basis point (bp) or 50 bp hike, given that bank has already raised rates sharply this year.
"Even though consumer price index inflation is running above the central bank's forecast for this year, it does not necessarily jeopardize the achievement of its 4.0% target next year," Credit Suisse analysts wrote in a note.
"We think the central bank will likely hike the policy rate by 25bps, although the decision will be a close call."
Turkey's lira slumped more than 1% to a record low of 9.6581 to the dollar, and was among the worst performing EM currencies this week after the central bank cut rates by twice as much as expected on Thursday.
Sentiment over Turkey was further hit by an international watchdog downgrading the country to a grey list for failing to head off money laundering and terrorist financing.
Under pressure from President Tayyip Erdogan to ease policy despite high inflation, the bank lowered its repo rate to 16%, bringing the cuts in the last month to 300 basis points in moves which have driven a sustained decline in the Turkish currency's value.
Most central European currencies retreated to the euro. Poland's zloty fell 0.2% as central banker Rafal Sura said interest rates should rise to pre-pandemic levels, but declined to say when he would vote for a further hike.
For GRAPHIC on emerging market FX performance in 2021, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2021, see https://tmsnrt.rs/2OusNdX
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For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see (Reporting by Ambar Warrick; Editing by Rashmi Aich)