* Turkey inflation at 19.89%, policy rate at 16% * More interest rates cuts to come in Turkey - economist * EM stocks down for 7th straight session * China’s economy faces new downward pressures - Premier Li * Ukraine bonds at April lows Nov 3 (Reuters) - Turkey’s lira underperformed on Wednesday as annual inflation neared 20%, widening the gap with the policy rate, and emerging market stocks extended losses to a seventh straight session in anticipation of tapering news from the U.S. Federal Reserve. Annual inflation in Turkey was 19.89% in October - the highest in nearly 2-1/2 years, rising from 19.58% in September. The policy rate at 16% is already well below inflation as the central bank cut by 300 basis points this year, pressured by Turkey’s president Tayyip Erdogan. Core inflation, which strips out energy, food and some other goods, eased to 16.82% from near 17% a month earlier. The lira fell by as much as 0.8%, but cut some losses as the number was below estimates of 20.4%. It was last trading down 0.2% at 9.627 per dollar. The currency is down almost 23%this year largely because of uncertain and unconventional monetary policy. “The small drop in core inflation and political pressure on the central bank means that further interest rate cuts lie in store,” said Jason Tuvey, senior EM economist at Capital Economics. “We have pencilled in 100bp reduction in the one-week repo rate at this month’s meeting,” and further aggressive easing ahead, he said. Other EM currencies traded in tight ranges with all eyes on the Fed, which is likely to start tapering pandemic-induced stimulus. A Reuters poll showed EM currencies are headed for more trouble next year as rate hikes are seen supporting the dollar. EM stocks fell 0.2%, in their longest losing streak since July, ahead of the decision. Massive monetary policy stimulus from major central bank has helped keep up flows into EM assets during the pandemic. China stocks were hit further by Premier Li Keqiang’s comments that China’s economy faces downward pressures. Meanwhile, China said it “resolutely opposes” Washington’s revocation of China Telecom Corp Inc’s licence to operate in the United States. Poland’s zloty rallied 0.4% against the euro, with the central bank seen hiking the key rate by 50 basis points to 1% on Wednesday. Ukraine dollar bonds fell to April lows as Russia’s Gazprom cut its daily volume of gas transit via Ukraine for the fourth time this year on Tuesday. Relations between the two countries have been fraught since Russia’s annexation of Crimea in 2014 and the outbreak of war in eastern Ukraine. 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 Reporting by Susan Mathew in Bengaluru; editing by Barbara Lewis