Emerging Europe Economics Update CBRT continues to defy orthodoxy in face of lira crisis Turkey’s central bank shrugged off a currency crisis, rising inflation as well as the recent hawkish turn from the Fed and remained obedient to President Erdogan by cutting its one-week repo rate by... 16th December 2021 · 3 mins read
Emerging Europe Economics Update Hawkish MNB signals that tightening has further to go The decision by Hungary’s central bank (MNB) to raise its base rate by 30bp, to 2.40%, at today’s meeting is largely symbolic. The key point is that the central bank struck a clear hawkish tone and... 14th December 2021 · 3 mins read
Emerging Europe Economics Update NBP slows tightening, but steps up hawkish rhetoric The National Bank of Poland’s decision to slow the pace of its tightening cycle with a 50bp interest rate hike (to 1.75%) seems a bit inconsistent with its more hawkish tone on inflation in the... 8th December 2021 · 3 mins read
Emerging Europe Economics Update Where do the risks lie across banking sectors? Banking sectors in Emerging Europe have come through the pandemic with few scars and vulnerabilities generally remain low, but we identify three potential areas of concern, including deposit... 7th December 2021 · 4 mins read
Emerging Europe Economics Update Turkey: five key questions (and answers) This Update answers some of the most common questions that we have received from clients during Turkey’s recent turmoil. In short, the economic fallout doesn’t look like it will be as bad as it was... 7th December 2021 · 4 mins read
Emerging Europe Economics Update Turkey & the macro fallout from past “sudden stops” The history books show that currency crises in other parts of the emerging world in recent decades have resulted in peak-to-trough falls in GDP of around 8% on average and pushed headline inflation up... 3rd December 2021 · 5 mins read
Emerging Europe Economics Update More to Polish industry resilience than meets the eye Poland’s industrial sector as a whole has shaken off widespread materials shortages in recent months, in part due to its more diversified sectoral make-up than the rest of CEE. But it also reflects... 2nd December 2021 · 4 mins read
Emerging Europe Economics Update Turkey: how strong is the fiscal picture? Turkey’s public finances have become more vulnerable to falls in the currency in recent years, although we think the likelihood of sovereign default is very low. Perhaps the bigger risk for the public... 25th November 2021 · 3 mins read
Emerging Europe Economics Update Macro fundamentals to support further shekel strength The Israeli shekel has appreciated sharply in the past few weeks, making it one of the best performing currencies during the pandemic. While we don’t expect this recent strength to continue in the... 24th November 2021 · 4 mins read
Emerging Europe Economics Update Turkey & policy responses during past “sudden stops” The Turkish lira’s sharp fall yesterday looks similar to the experience of sudden stops elsewhere. In those instances, central banks usually responded with interest rate hikes of around 600bp as well... 24th November 2021 · 3 mins read
Emerging Europe Economics Update Cyclical pressures set to keep CEE inflation elevated Inflation across Central and Eastern Europe (CEE) has continued to surge and now sits at its highest level in around 20 years. This can be partly attributed to global factors, such as rising energy... 24th November 2021 · 4 mins read
Emerging Europe Economics Update Lira in freefall as policymakers remain defiant The Turkish lira has plunged this morning after President Erdogan signalled yesterday that policymakers have no appetite to respond to the currency’s recent falls by hiking interest rates. Further... 23rd November 2021 · 3 mins read
Emerging Europe Economics Update BoI offers no new guidance, 2022 rate hike still in play The Bank of Israel (BoI) left its policy rate on hold at 0.10% as expected at its meeting today, confirmed that it will end its bond purchase programme next month and emphasised that it will continue... 22nd November 2021 · 2 mins read
Emerging Europe Economics Update Assessing the risks in Turkey’s banking sector Turkey’s banks are generally in a good position to cope with sharp falls in the lira: they have large capital buffers to deal with a rise in non-performing loans, off-balance sheet instruments to... 22nd November 2021 · 5 mins read
Emerging Europe Economics Update Lira sell-off and lessons from other “sudden stops” The fresh falls in the Turkish lira following the CBRT’s interest rate cut today have left Turkey firmly in crisis territory and echoes of previous “sudden stops” during major EM currency crises in... 18th November 2021 · 3 mins read
Emerging Europe Economics Update CBRT defies investors with rate cut, crisis risks mount The sharp falls in the lira over the past few days clearly weren’t enough for Turkey’s central bank to stand up to President Erdogan as it pushed ahead with a 100bp cut (to 15.00%) to its one-week... 18th November 2021 · 3 mins read
