EM Central Banks
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July 26, 2024 2:51 PM UTC
The Central Bank of Argentina's plan for macroeconomic stabilization includes three stages: an orthodox fiscal exit, establishing an orthodox monetary framework, and prudently lifting FX controls. The fiscal deficit reduction has helped end the monetization of the deficit, while transitioning to a c
July 26, 2024 2:16 PM UTC
Bottom Line: As we predicted, Central Bank of Russia (CBR) announced on July 26 that it increased its policy rate by 200 bps to 18% after four consecutive rate holds, and first time in 2024, to tame the stubborn price pressures stemming from high military spending, tight labour market and fiscal pol
July 25, 2024 1:52 PM UTC
The Mexican economy shows mixed signals for Banxico. Economic activity indicates a slowdown, with weaker industrial activity and decelerating formal employment. However, inflation is rising, particularly in non-core components like energy and agricultural goods, influenced by climate conditions. The
July 23, 2024 4:07 PM UTC
The Brazilian government will implement BRL 15 billion in contingency expenditures to meet fiscal targets, aiming for a 0.25% GDP primary deficit in 2024. This move, though addressing fiscal issues, pursues the lower target band and may undermine fiscal credibility. The contingency is due to revenue
July 23, 2024 1:48 PM UTC
Bottom Line: As predictions were centred around no change, Central Bank of Turkiye (CBRT) kept the policy rate stable at 50% on July 23. CBRT said in a statement that tight monetary stance will be maintained until a significant and sustained decline in the underlying trend of monthly inflation is ob
July 19, 2024 1:10 PM UTC
The Argentine economy showed a 1.3% growth in May, driven mainly by the recovering agricultural sector, which is 100% higher than last year. However, other sectors like manufacturing and construction continue to lag. Despite the growth, economic recovery is uncertain due to fiscal adjustments, excha
July 17, 2024 1:13 PM UTC
Bank Indonesia held its key interest rate at 6.25% to stabilize the rupiah and attract FX inflows, while maintaining interventions in the FX and bond markets. Inflation remains within target, and GDP growth forecasts are steady. Future rate cuts depend on US Federal Reserve actions. A 25bps cut is e
July 15, 2024 4:22 PM UTC
Indonesia's parliament has set ambitious economic targets for 2025, tasking Bank Indonesia with strengthening the rupiah to USD/IDR 15,300-15,900. The parliament also set a GDP growth target of 5.3-5.6% and a fiscal deficit target of 2.29-2.82% of GDP. Despite revising the 2024 fiscal deficit to 2
July 15, 2024 1:24 PM UTC
Argentina's CPI rose by 4.6% in June, up from 4.1% in May, missing market expectations of 5.1%. The Y/Y CPI fell to 271%. Housing items saw the highest increase at 14.2%, while core CPI growth slowed to 3.0%. Inflation may stabilize around 4.0% monthly. The Central Bank of Argentina's policies are m
July 12, 2024 2:43 PM UTC
Banxico kept the policy rate unchanged at 11.0% but showed a slightly dovish tone, hinting at possible cuts in August. June's CPI figures revealed a widening gap between core and non-core inflation. Despite recent economic slowdowns and the MXN Peso's depreciation, Banxico expects economic slack to
July 9, 2024 7:46 PM UTC
INEGI reports Mexico's CPI rose 0.38% in June, above expectations. Year-over-year CPI increased to 5.0%, with core CPI at 4.1% and non-core CPI at 7.7%. Non-agricultural goods drove the rise, raising concerns about inflation due to climate-related agricultural shocks. Food and beverages saw the high
July 2, 2024 1:36 PM UTC
Bank Indonesia in a pro-stability move decided to maintain the key policy rate at 6.25%. The move comes at a time when the weakness in the Indonesia Rupiah has increased in recent weeks. A rate cut is therefore not on the horizon.
July 1, 2024 8:05 AM UTC
Enhancing fiscal credibility is key post-election in India and S Africa, but also for Brazil. India, will do this in the 3 week of July, but S Africa needs to move from ANC/DA led coalition optimism to reality quickly. Brazil needs to stop the vicious circle of sentiment building up on fiscal slip
June 28, 2024 1:59 PM UTC
The Mexico Central Bank (Banxico) kept the policy rate unchanged at 11.0%, despite one member advocating a 25 basis points cut. Banxico hinted at potential rate cuts in 2024 due to a slowing economy and inflation outlook. An August cut remains possible but seems premature. Market and Banxico inflati
June 27, 2024 12:32 PM UTC
Bottom Line: As predictions were centred around no change, Central Bank of Turkiye (CBRT) kept the policy rate stable at 50% on June 27 despite galloping inflation edged up to 75.5% in May, up from 69.8% in April. CBRT said in a statement on June 27 that "(…) the tight monetary stance will be main
June 26, 2024 5:23 PM UTC
The latest minutes from the RBI MPC meeting indicated that members are optimistic about India's economic growth outlook but are exercising caution due to inflation concerns. The minutes underscored differing viewpoints between external and internal MPC members regarding future policy actions. While
June 25, 2024 2:16 PM UTC
Argentina's GDP shrank by 2.6% in Q1, entering a technical recession. Investments and consumption dropped significantly, while agriculture grew. This contraction, driven by Milei's economic policies, is expected to continue in Q2, with rising unemployment and poverty. A slightly recovery is anticipa
June 25, 2024 10:15 AM UTC
• The global economy is showing signs of healing, as inflation comes back towards targets and growth recovers momentum in some economies. Nevertheless, the cyclical headwind of lagged monetary tightening remains in DM countries, and will likely be one of the forces slowing the U.S. economy
June 25, 2024 8:05 AM UTC
We see Fed rate cuts from September starting to soften USD strength into year end and 2025. Beneficiaries will include currencies with inflation moving towards target and high real rates or, alternatively, undervalued currencies. This should benefit the Brazilian Real (BRL) and Indonesian Rupiah
June 24, 2024 6:00 PM UTC
· Brazil and Mexico growth will decelerate from the growth rates in 2023. The stronger basis of comparisons in 2023 and the tight monetary policy will diminish growth during 2024. Brazil robust Agricultural growth will not repeat in 2023 while Mexico is on the limit of growing due to a
June 21, 2024 9:45 AM UTC
• Economic activity in emerging Asian economies is forecast to remain strong. Despite several challenges, including a tight oil market, constrained liquidity conditions, and delayed rate cuts, the region's economic activity is expected to show resilience. Other potential obstacles include u
June 21, 2024 5:54 AM UTC
Bank Indonesia in a pro-stability move decided to maintain the key policy rate at 6.25%. The move comes at a time when the weakness in the Indonesia Rupiah has increased in recent weeks. A rate cut is therefore not on the horizon.
June 7, 2024 5:10 PM UTC
INEGI reported a 0.2% CPI decrease in May, with annual CPI stable at 4.7%. Electricity prices dropped, contributing to the decline. Core CPI rose 0.2%, while Non-Core fell 1.3%. Persistent Services CPI and food price shocks may sustain inflation. Peso volatility could also pressure inflation, likely
June 7, 2024 12:57 PM UTC
Bottom Line: Central Bank of Russia (CBR) announced on June 7 that it decided to keep the policy rate unchanged at 16% for the fourth meeting in a row, but signalled that a rate hike is possible in the near term to tame the stubborn price pressures stemming from high military spending, tight labour
May 30, 2024 3:06 PM UTC
Bottom line: As widely expected, South African Reserve Bank (SARB) kept the key rate constant at a 15-year high of 8.25% on May 30 despite inflation rate fell for a second consecutive month in April due to less severe power cuts (load shedding), a firmer South African rand (ZAR) coupled with lower f
May 28, 2024 10:11 AM UTC
Indonesia’s consumer price inflation is expected to remain broadly stable at the 3% y-o-y mark in May. Supply disruption due to floods in Sumatra region alongside persistent high food prices will keep price pressures elevated.
May 24, 2024 9:24 PM UTC
Banxico maintained the policy rate at 11%, reflecting a cautious stance amid persistent inflation and economic uncertainty. The board was unanimous in this decision but divided on the timing of future cuts. Despite expectations for a rebound in economic activity, concerns about inflationary pressure
May 23, 2024 7:30 PM UTC
Bottom Line: As predictions were centred around no change, Central Bank of Turkiye (CBRT) kept the policy rate stable at 50% on May 23 despite galloping inflation which edged up to 69.8% in April, up from 68.5% in March. CBRT said in a statement on May 23 that "(...)considering the lagged effects of
May 22, 2024 2:44 PM UTC
Argentina has delivered the fourth consecutive months of primary surplus. Most of this surplus comes from cutting the consumption of goods and services by the national administration and mainly by the pace of revenues growth which surpassed the growth of expenditures. However, the surpluses are redu
May 20, 2024 2:38 PM UTC
At the beginning of the year, Mexico's exports are losing traction, stagnating as imports surpass exports. This could be due to adjustments to U.S. demand and inflation effects. With internal demand cooling and the U.S. economy decelerating, growth may shift to Mexico’s internal economy, bolstered
May 15, 2024 12:18 PM UTC
Argentina's April CPI dropped to 8.8% after six months above 10%, with Y/Y CPI at 289%. Key rises included housing (+36%) and communication (+14.2%). Javier Milei's program and fiscal adjustments have reduced monetary emissions to zero, easing inflation. The Central Bank cut the policy rate to 40%.
May 14, 2024 3:54 AM UTC
India’s consumer price inflation eased amrginally to 4.83% yr/yr in April, reflecting lower fuel and light prices. The government cut prices of LPG cylinders in India ahead of the elections. However, food price pressures persist despite various supply side measures, underscoring the sticky nature
May 10, 2024 12:44 PM UTC
Banxico's decision to maintain the policy rate at 11% reflects a cautious stance amidst rising inflation and a slowing economy. Despite external volatility, the MXN remains resilient. The main concern is services inflation being stickier. With a revised inflation forecast indicating a longer period
May 9, 2024 6:11 PM UTC
April's CPI data, despite a 0.2% m/m growth, reveals a significant y/y uptick to 4.6% from March's 4.4%, challenging norms due to electricity tariff adjustments. Core CPI maintained stability with a 0.2% increase, while Core Goods CPI rose by 0.3% and Services CPI by 0.1%, accumulating a 5.2% y/y gr
May 7, 2024 12:43 PM UTC
Banxico will convene on May 9 to decide on the policy rate, having initiated a possible cutting cycle. Despite concerns, the MXN remains stable. The 25bps adjustment aims to maintain tight monetary policy while mitigating inflation. The board may split over this decision, but Banxico is likely to co
May 3, 2024 10:45 AM UTC
While U.S. economic developments, plus Fed policy prospects, will be important in terms of EM currency developments, domestic politics and fundamentals will also be decisive. These can keep the South Africa Rand volatile in the remainder of 2024, given the risk of a coalition government and African
May 2, 2024 2:27 PM UTC
Moody’s upgraded Brazil's outlook to positive from stable, maintaining its Ba2 rating, signaling a potential move to Ba1 soon. Strong growth prospects, attributed to institutional reforms, drove this shift. Despite lingering doubts, improved fiscal conditions and anticipated tax reform are bolster
April 30, 2024 5:54 PM UTC
INEGI released Mexico's Preliminary GDP for Q1 2024, showing 0.2% growth, slightly above expectations. Annual GDP slowed to 2.0% from 2.8% in Q4 2023. The economy is losing momentum due to tight monetary policy and weakened U.S. demand. Agriculture contracted by 1.1%, Industry by 0.4%, while Service
April 29, 2024 5:22 PM UTC
INEGI will release Mexico's Preliminary GDP data, indicating 0% growth in Q1, likely due to stagnation in key sectors like manufacturing and construction. The service sector, hit hard by the pandemic, also shows signs of sluggishness. While recovery is expected, sustained poor growth raises concerns
April 29, 2024 11:26 AM UTC
In a pre-emptive move to both curb inflationary pressures and safeguard the Indonesia Rupiah (IDR) against furhter depreciation, Bank Indonesia, in a surprise move, increased its main policy rate by 25 bps to 6.25%. However, further rate hikes are not expected as the central bank remains wary of hur
April 26, 2024 5:52 PM UTC
The INDEC data for February reveals a 0.2% economic shrinkage, signalling a 5.1% drop since August 2023, potentially leading to a Q1 2024 recession. High inflation and fiscal adjustments are primary causes. Some foresee 0% April inflation due to price realignment and stable ARS. Despite low reserves
April 26, 2024 1:12 PM UTC
Bottom Line: As widely expected, Central Bank of Russia (CBR) announced on April 26 that it decided to keep the policy rate unchanged at 16% for the third meeting in a row. CBR made critical changes in its key rate and inflation forecasts as it lifted its 2024 inflation forecast to 4.3-4.8% from 4-4