Emerging Europe Economics Update CNB delivers another hawkish shock The Czech National Bank (CNB) hiked rates by 100bp (to 3.75%) today and Governor Rusnok struck an incredibly hawkish tone after the meeting. The tightening cycle clearly has further to run and we now... 22nd December 2021 · 2 mins read
Emerging Europe Economics Update First thoughts on Turkey’s FX-indexed deposit scheme A new scheme announced by Turkey’s President Erdogan last night, which compensates holders of lira deposits for exchange rates losses, has triggered a sharp rally in the lira and will help to mitigate... 21st December 2021 · 4 mins read
Emerging Europe Economics Update Turkey’s crisis in four charts Following yesterday’s interest rate cut in Turkey, the lira has plunged again and is now faring worse than other Emerging Europe currencies have done during recent sudden stops. There are some signs... 17th December 2021 · 3 mins read
Emerging Europe Economics Update CBR accelerates tightening amid surging inflation Russia’s central bank (CBR) stepped up the pace of its tightening cycle today with a 100bp interest rate hike, to 8.50%, and the hawkish communications reinforce the message that it will not hesitate... 17th December 2021 · 3 mins read
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
