* Turkey cuts interest rate to 18% from 19% * Evergrande jumps 18%, onshore bond coupon payment “resolved” * HK Shares rise 1%, EM stock index extends gains to day three * S.African cenbank seen holding rates (Updates after Turkey central bank deicision) Sept 23 (Reuters) - Turkey’s lira slumped as much as 1.5% on Thursday, just shy of its lowest on record against the dollar, after the central bank cut the benchmark interest rate by 100 basis points to well below the country’s inflation rate. Under pressure from President Tayyip Erdogan who has long demanded rate cuts, central bank Governor Sahap Kavcioglu slashed the one-week repo rate to 18% from 19% despite annual inflation having surged to 19.25% last month. The consensus expectation in a Reuters poll was for rates to stay unchanged. The lira fell as far as 8.808 before recovering slightly to 8.77 against the dollar at 1113 GMT, compared to 8.6550 before the rate announcement. It hit a record low of 8.88 in June.The lira underperformed most other currencies , which capitalized on dollar weakness after the Federal Reserve signalled rate hikes might be considered only post-tapering, a process which may last until mid-2022. Turkey dollar bonds declined and volatility gauges spiked. Stocks fell 0.4%, erasing session gains of as much as 0.7%. “The cut signals Governor Kavgioglu is no longer in control of the decision-making process at the (bank) as President Erdogan’s preference for lower rates now has materialised,” said Ima Sammani, an EM FX analyst with Monex Europe. “This has a large impact on TRY stability, and today’s market reaction in the lira is very telling... It also signals the start of an easing cycle and a more dovish (central bank) reaction function - something that investors had long feared.” S.AFRICAN RATE DECISION The move comes as most EM central banks have sought to raise rates amid rising inflation. But South Africa’s central bank was expected to leave its key rate at a record low of 3.50% on Thursday as inflation remains benign and the economy is seen contracting this quarter. The rand was up 0.9% ahead of the decision, expected at 1300 GMT. The currency, which had been among the best performing EM currencies so far in 2021, lost some of its shine after riots compounded concerns over the economic impact of the coronavirus pandemic. The rand is now down 0.1% on the year.EM stocks were set for their best session in three weeks, up 0.7% on broad-based gains after Chinese property developer Evergrande, burdened with $305 billion in debt , surged 18% following a one-day holiday. Its Hengda Real Estate Group unit said it had “resolved” a coupon payment on an onshore bond, and its chairman moved to reassure retail investors. Investors are now awaiting further news on $83.5 million in interest payments on an offshore bond due on Thursday. For GRAPHIC on emerging market FX performance in 2021, see tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2021, see tmsnrt.rs/2OusNdX For TOP NEWS across emerging markets For CENTRAL EUROPE market report, see For TURKISH market report, see For RUSSIAN market report, see