Investment Weekly

Chart of the week – EM central banks in easing mode

Last week, the Reserve Bank of India delivered front-loaded policy easing with a surprise 50bp rate cut. It follows a number of emerging market central banks that have taken decisive policy action recently. In part, these moves are down to improving fiscal outlooks. But the critical factor has been the weaker dollar, as investors reassess its status as a global safe haven. With many EM economies transforming their macro structures since the “fragile five” phase a decade ago, and amid faltering confidence in American exceptionalism, it’s no wonder investors are paying more attention.