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Keep it easy! Emerging central banks keep cutting rates in May

Published 06/03/2019, 07:37 AM
Updated 06/03/2019, 07:40 AM
© Reuters.  Keep it easy! Emerging central banks keep cutting rates in May

By Karin Strohecker and Ritvik Carvalho

LONDON (Reuters) - Interest rate cuts by emerging market central banks outstripped rate hikes for a fourth straight month in May, taking their cue from the dovish turn of major central banks as fears over the health of the global economy and trade tensions take their toll.

Interest rate moves by central banks across a group of 37 developing economies showed two net rate cuts last month after recording three net rate cuts in the three months prior.

The fourth month of net rate cuts follows a tightening cycle that ended in early 2019 during which interest rate hikes by emerging market central banks outstripped or matched cuts for nine straight months to battle the fallout from a strong dollar, rising inflation and softer currencies.

Below is a list of recent emerging market central bank monetary policy changes:

SRI LANKA - The central bank cut its key interest rates by 50 basis points on May 31, as widely expected, to support its faltering economy as overall business and consumer confidence slumped following last month's deadly bomb attacks.

TAJIKISTAN - The central bank reduced the refinancing rate to 13.25% from 14.75% on May 31.

KYRGYZSTAN - Policy makers in the Central Asian nation cut the benchmark rate to 4.25% from 4.50% on May 28, citing slowing inflation.

ANGOLA - Angola's central bank cut its benchmark lending rate by 25 basis points to 15.5% on May 24.

COSTA RICA - The central bank cut the key policy rate to 4.75% from 5% on May 23. https://

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ZAMBIA - The central bank in Lusaka raised the benchmark lending rate to 10.25% from 9.75% on May 22 to counter inflationary pressure and support macroeconomic stability.

PAKISTAN - Soaring inflation prompted Pakistan's central bank to raise its key interest rate to 12.25% on May 20 with policy makers flagging further rises on the back of higher oil prices and reforms required for a bailout from the International Monetary Fund.

JAMAICA - Jamaica's central bank cut its interest rate by 50 basis points to 0.75% on May 19 - the third cut since the start of the year. https://

THE PHILIPPINES - The central bank cut its benchmark interest rate on May 9 by 25 basis points to 4.50%, on expectations inflation will ease after the economy grew at its slowest pace in four years in the first quarter.

MALAYSIA - The central bank on May 7 became the first in Southeast Asia to cut its key interest rate this year, by 25 basis points to 3.0%, moving to support its economy at a time of concern about global growth.

RWANDA - Rwanda's central bank cut its key repo rate by 50 basis points on May 6 to 5.0%.

MALAWI - Malawi's central bank cut its benchmark lending rate by 100 basis points on May 3 to 3.5%.

CZECH REPUBLIC - The Czech National Bank raised interest rates on May 2, using a window of opportunity created by easing economic risks abroad to stem rising domestic inflation by fine-tuning a tightening cycle it had paused at the end of 2018.

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AZERBAIJAN - The central bank cut its refinancing rate by 25 basis points to 8.75% on April 26, citing an improved macroeconomic situation and higher global oil prices.

UKRAINE - Ukraine's central bank trimmed its main interest rate to 17.5% on April 25, the first decrease in the past two years.

KAZAKHSTAN - Policymakers cut the policy rate by 25 basis points to 9.00% on April 15 in an expected move taken after President Kassym-Jomart Tokayev ordered them to make credit more affordable.

INDIA - The central bank cut the interest rate as expected by 25 basis points on April 4, a move to lift the economy a week before voting began in a marathon election that will decide whether Prime Minister Narendra Modi gets a second term. Inflation remains subdued, though falling farm incomes and record high unemployment have seen economic growth slide to 6.6% in December - its slowest in five quarters.

NIGERIA - In a surprise move, the central bank cut its benchmark interest rate to 13.5% from 14% on March 26 as part of an attempt to stimulate growth in Africa's biggest economy and signal a "new direction".

PARAGUAY - Paraguay's central bank cut its policy rate by 25 basis points to 4.75% on March 22.

GEORGIA - The central bank cut its refinancing rate to 6.5% from 6.75% on March 13, citing forecasts suggesting that annual inflation would stay close to its 3% target this year.

TUNISIA - Policymakers in Tunisia raised the key interest rate to 7.75% from 6.75% on Feb. 19 to combat high inflation - the third such hike in the past 12 months.

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EGYPT - Egypt's central bank made a surprise cut to its overnight deposit rate on Feb. 14, citing a strong drop in inflation and an improvement in other macroeconomic indicators. The bank lowered its deposit rate to 15.75% from 16.75 and its lending rate to 16.75% from 17.75%, its first rate cuts since March 2018.

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