A spell of relative calm for EM currencies was broken this month, as several including the Argentine peso, Turkish lira, Brazilian real and South African rand fell sharply, despite a more dovish US Fed. This weakness can partly be pinned on domestic events, but concerns about the health of the global economy have also hit risk appetite. Both the Turkish and Argentine central banks have taken steps to tighten monetary conditions. But elsewhere low inflation makes policy responses unlikely. Indeed, we think the general direction for EM monetary policy this year is still likely to be towards interest rate cuts.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services