EMERGING MARKETS-Currencies, stocks decline amid caution on US tariff developments

By Ragini Mathur and Purvi Agarwal

July 7 (Reuters) - Most emerging market stocks and currencies dipped on Monday over uncertainties in U.S. trade policy, leaving market participants cautious.

The U.S. is close to finalising several trade pacts in the coming days and will notify other countries of higher tariff rates by July 9, set to take effect on August 1, U.S. President Donald Trump said on Sunday.

In April, Trump unveiled a base tariff rate of 10% on most countries and additional duties ranging up to 50%, although he later delayed the effective date for all but 10% until July 9. The new date offers countries a three-week reprieve.

"The fact that it's been delayed shows that they are negotiating, they're trying to strike deals and this is something that the market is kind of welcoming," said Fawad Razaqzada, market analyst at City Index.

"The market is still confident that eventually there will be some deals... they are not anywhere near the levels of worry that they were previously showing in April."

Trump also threatened an extra 10% on countries aligning themselves with "anti-American policies" of the BRICS group that includes Brazil, Russia, India, China and South Africa, among others.

The South African rand ZAR= fell 1.2% following the latest threat. Its stocks index .JTOPI slipped 0.2%.

A South African trade ministry spokesperson said the country is not "anti-American" and wants to negotiate a deal with the U.S. It has asked for an extension to the July deadline.

Trump's chaotic trade policy has forced global policymakers into reassessing their monetary policy stance and investors into looking at their holdings as they brace for a potential tariff impact.

MSCI's index tracking global emerging market currencies .MIEM00000CUS was down 0.4% on the day, pressured by a higher dollar =USD with the dollar index poised to recover some of its losses logged in the last week.

In the Middle East, Turkey's lira TRYTOM=D3 weakened 0.2%, while the country's stocks .XU100 fell 1.5%, following news of a widening legal crackdown against the main opposition party over the weekend.

Turkey's 5-year credit default swap widened by 13 basis points from Friday's close to 292 basis points, according to data from S&P Global Market Intelligence.

Emerging European currencies were mixed against the euro.

Poland's zloty EURPLN= was trading 0.3% lower, the only significant mover. Hungary's forint EURHUF= was flat after data showed retail sales rose by an annual 2.1% in May following a revised 4.9% rise in April.

MSCI's global emerging market stocks gauge .MSCIEF was 0.5% lower, with heavyweight Asian stocks logging declines.

Regional stocks in emerging Europe were also lower, with Poland .WIG20 and Hungary .BUX down 0.4% and 0.1% respectively.

On the docket is an interest rate decision in Israel.

HIGHLIGHTS:

** Vietnam Q2 GDP growth quickens on strong exports

** Thailand's trade proposal to the U.S. includes zero tariffs on some imports, says finance minister

For TOP NEWS across emerging markets nTOPEMRG

For CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB