EMERGING MARKETS-EMEA FX sinks, Turkey's lira plunges to another record low

* Turkish lira breaches 8.2 to USD, 9 a possibility

* Russian rouble leads FX losses

* South African rand drops ahead of mid-term budget

* CEE currencies fall

By Ambar Warrick

Oct 28 (Reuters) - Turkey's lira touched a new low for a third day on Wednesday as the country's inflation outlook worsened and a surge in the novel coronavirus and uncertainty over the U.S. election weighed on other emerging markets in Europe, Middle East and Africa.

The lira sank more than 0.7%, breaching 8.2 to the dollar. The Turkish Central Bank raised its 2020 inflation forecast, but pledged to use all its tools to tighten monetary policy because of the risks posed by weakness in the lira.

The currency's weakness has been triggered by the central bank standing pat on interest rates, when geopolitical tensions in the Caucasus and the eastern Mediterranean have shaken investor faith in the country.

"There is no reason USD/TRY could not overshoot to a level such as 9.00 in coming weeks," Tatha Ghose, FX & EM analyst at Commerzbank wrote in a note.

"While rate hikes by the central bank would no longer act as a credible long-term policy response, we get the sense that a large emergency rate hike might be the only policy response we see in an attempt to break the momentum."

The rouble led losses across EMEA, dropping 0.9% ahead of a month-end deadline for local exporters to convert foreign currency earnings. Weak oil prices and a continued spike in local coronavirus cases also weighed on the currency.

The South African rand fell 0.7% ahead of a mid-term budget report from Finance Minister Tito Mboweni. The report will lay out high-level spending priorities for the next three years.

South African consumer price inflation fell in September as pressure from the coronavirus dissuaded consumption.

Central European currencies such as the Hungarian forint , the Polish zloty and the Czech crown fell between 0.2% to 0.5% to the euro, as rising virus cases in the region raised the possibility of new curbs on economic activity.

In China, the yuan weakened after some banks tweaked a methodology for fixing the currency's daily midpoint. The implied one-week currency volatility of the offshore yuan spiked to its highest level since Jan 2016 ahead of the U.S. elections.

For GRAPHIC on emerging market FX performance in 2020, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2020, see https://tmsnrt.rs/2OusNdX

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(Reporting by Ambar Warrick in Bengaluru; editing by Barbara Lewis)