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EMERGING MARKETS-Turkish lira firms 1.5%; Russian decision awaited

* Turkey's lira jumps 1.5%

* Turkish 2021 GDP forecast raised - cenbank survey

* Russian cenbank seen hiking by 25 or 50 bps

* S.African rand set to end lower on week

By Susan Mathew

June 11 (Reuters) - The Turkish lira jumped 1.5% on Friday ahead a meeting between Turkish President Tayyip Erdogan and his U.S. counterpart Joe Biden, and Russia's rouble hit a near 11-month high ahead of an expected rate hike by the central bank later in the day.

Their gains took an index of emerging market currencies to its highest on record. The index is dominated by Asian currencies such as China's yuan, which has risen sharply by around 12% against the dollar since May 2020 and hit its strongest levels in more than three years.

Stocks in the developing world were also on a stronger footing as investors bought into the U.S. Federal Reserve's view that a period of higher inflation was transitory. That dented the dollar and U.S. bond yields.

MSCI's EM stocks index rose 0.3%, bringing it to positive territory for the fourth straight week - its longest winning streak since January.

"We do not expect a more sustained disruption to equity markets. We agree with the Fed that elevated inflation pressures will prove short-lived. In our view, investors should continue to position for reflation," said UBS Wealth Managements Chief Investment Officer Mark Haefele.

Mainland China stocks closed lower for the day ahead of a long weekend dragged down by liquor and financial firms. Didi Chuxing, China's biggest ride-hailing firm, on Thursday made public the filing for its U.S. stock market listing, setting the stage for what is expected to be the world's biggest initial public offering this year.

Turkey's lira touched a one month high against the dollar to take the lead among EM currencies, setting up for its best week in nearly three months.

During Biden's visit to Europe next week, investors hope that he and Erdogan will discuss differences over Ankara's planned purchase of Russian S-400 air defence systems which are incompatible with NATO's defences.

Turkish bonds were also on their longest winning streak since November and are now back within touching distance of where they were before Erdogan sacked hawkish central bank governor Naci Agbal back in March.

Reduced implied volatility also aided inflows into the currency, as did a central bank survey that showed the forecast for 2021 GDP growth has been raised to 4.9% from 4.3%. Official data showed Turkish industrial output surged 66% year-on-year in April, exceeding forecasts and expanding for an eleventh straight month.

Russia's rouble firmed 0.3% with the central bank decision due at 1030 GMT. Data showing higher inflation last week strengthened the case for a 50 basis point hike. South Africa's rand rose 0.4%, but not enough to pull the best performing EM currency this year in to the black for the week.

As well as a general consolidation in FX markets this week, South Africa was officially declared to be in its third wave of COVID-19 infections on Thursday, as the continent's worst-hit country registered 9,149 new cases.

For GRAPHIC on emerging market FX performance in 2021, see For GRAPHIC on MSCI emerging index performance in 2021, see

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see

(Reporting by Susan Mathew in Bengaluru; Editing by Simon Cameron-Moore)