* Evergrande drops after saying it is unable to issue new debt

* Ghana expected to hold interest rates steady

* Turkey manufacturing confidence falls in August

Sept 25 (Reuters) - Emerging market stocks fell on Monday as a slump in the shares of Evergrande recalled attention to China's property sector's debts and the prospect of higher-for-longer U.S. interest rates limited risk appetite.

MSCI's gauge of emerging market (EM) equities fell 0.6% by 0846 GMT, starting the last week of the third quarter on a sombre note.

The index has shed 3% so far this quarter, as a rally from the beginning of the year lost momentum because of China's uneven economic recovery and concern over interest rates after the Federal Reserve last week signalled another possible hike this year.

Hong Kong's Hang Seng index led a fall in Asian stock markets on Monday, with shares of Evergrande plunging 21.8% after the developer said it could not issue new debt because of an ongoing investigation into one of its subsidiaries.

China's blue-chip CSI 300 index fell 0.7% while the yuan weakened by 0.2% against the dollar ahead of a week-long holiday that starts on Friday.

EM currencies edged 0.2% lower against a strong dollar.

"We continue to point at more upside risks to the dollar in the near term as the evidence of U.S. activity slowdown may take longer to show," Francesco Pesole, FX strategist at ING, said in a note.

Investors await U.S. inflation data later this week. For emerging markets, interest rate decisions from Hungary, Mexico and Colombia are on the watchlist.

The Hungarian forint was flat against the euro, while the Polish zloty gained 0.4%, extending last week's recovery after data showing the domestic registered unemployment rate stayed flat at 5.0% in August.

The Turkish lira weakened to 27.21 versus the dollar. Data showed the country's manufacturing confidence fell to 104.4 points in August.

The Indian rupee fell 0.2%, eroding the prior session's gains driven by JPMorgan's inclusion of Indian bonds in its index.

Elsehwhere, Egypt said it had agreed with the International Monetary Fund (IMF) to merge the fund's first and second reviews of its economic reform programme.

Moody’s changed Mozambique's outlook to 'stable' from 'positive' and S&P late on Friday upgraded Albania's outlook to positive on improved economic fundamentals.

The Bank of Ghana is expected to hold rates at 30.00% later on Monday, a Reuters poll found.

For GRAPHIC on emerging market FX performance in 2023, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2023, see https://tmsnrt.rs/2OusNdX

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For CENTRAL EUROPE market report, see

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For RUSSIAN market report, see (Reporting by Amruta Khandekar; editing by Barbara Lewis)