LONDON (Reuters) - Emerging market central banks accelerated interest rate cuts in July, with policymakers rushing to trim benchmarks as major central banks including the U.S. Federal Reserve and the European Central Bank adopted a more dovish tone.
Interest rate moves by central banks across a group of 37 developing economies showed a net eight rate cuts last month — the largest number since March 2015. Some unexpected entrants such as South Korea and Serbia joined the list. In June, developing market central banks recorded a net five rate cuts.
The sixth month of net rate cuts follows a tightening cycle that ended in early 2019. Then, interest rate hikes by emerging market central banks outstripped or matched cuts for nine straight months as they battled the fallout from a strong dollar, rising inflation and softer currencies.
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Below is a list of recent emerging market central bank monetary policy changes:
HONG KONG - The Hong Kong Monetary Authority (HKMA) cut its base rate charged through the overnight discount window by 25 basis points to 2.5% on August 1, its first cut since late 2008, in line with the U.S. Federal Reserve’s move. Hong Kong’s monetary policy moves in lock-step with the Fed as its dollar is pegged at a tight range of 7.75-7.85 per dollar.
MOLDOVA - The central bank raised its main interest rate to 7.5% from 7% on July 31 to fight rising inflation caused by wage increases and higher food prices.
SAUDI ARABIA / BAHRAIN / UNITED ARAB EMIRATES - Central banks of Saudi Arabia, Bahrain and the United Arab Emirates - whose currencies are all pegged to the U.S. dollar - cut key interest rates to preserve monetary stability on July 31 after the Federal Reserve lowered U.S. interest rates for the first time in over a decade.
BRAZIL - In its first rate cut since March 2018, the central bank cut its benchmark interest rate to a new low of 6.00% on July 31, an aggressive first move in a widely anticipated easing cycle to inject life into a moribund economy and prevent inflation from slipping too far below target.
AZERBAIJAN - The central bank said on July 26 it had cut its refinancing rate to 8.25% from 8.50%.
RUSSIA - Policy makers cut the key interest rate on July 26 and flagged that one or two more cuts were possible later this year as Russia faces sluggish economic growth and slowing inflation.
TURKEY - The central bank slashed its key interest rate by a bigger-than-expected 425 basis points to 19.75% on July 25 to spur a recession-hit economy, its first step away from the emergency stance adopted during last year’s currency crisis.
PARAGUAY - The central bank cut its policy rate by 25 basis points to 4.50% on July 22.
SOUTH AFRICA - The central bank cut its main lending rate as expected July 18, but struck a cautious tone that suggested future cuts in borrowing costs were not a foregone conclusion despite benign inflation.
UKRAINE - Policy makers cut the main interest rate by half a percentage point to 17% on July 18, citing a downward inflation trend which is expected to continue in coming months and could pave the way for further monetary easing.
INDONESIA - The central bank cut its benchmark interest rate for the first time in nearly two years on July 18 in a bid to lift sluggish economic growth.
SOUTH KOREA - The central bank delivered a surprise interest rate cut on July 18, and shaved this year’s growth forecast to the lowest in a decade, as a brewing dispute with Japan piled more pressure on the trade-dependent economy.
PAKISTAN - Policy makers hiked the main interest rate by 100 basis points on July 16 to 13.25%, citing increased inflationary pressures and a likely near-term rise in prices from higher utility costs.
SERBIA - The central bank unexpectedly cut its main interest rate by 25 basis points to 2.75% on July 11 to bolster lending and growth, the first such move in over a year.
DOMINICAN REPUBLIC - Policymakers cut interest rates by 50 basis points to 5% on June 30.
COSTA RICA - The central bank cut the key policy rate to 4.50% from 4.75% from June 20.
MOZAMBIQUE - The central bank cut its benchmark interest rate by 100 basis points on June 19.
CHILE - Chile’s central bank unexpectedly cut the benchmark interest rate by 50 basis points to 2.5% on June 7 as it braced for a sharper economic slowdown because of the U.S.-China trade dispute.
INDIA - The Reserve Bank of India cut its policy interest rate by 25 basis points in a widely expected move on June 6, while also changing its policy stance to “accommodative,” after latest data showed the economy growing at its slowest in over four years.
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.
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.
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.
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.
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.
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”.
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.
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.
Reporting by Karin Strohecker,; Graphic by Ritvik Carvalho,; Editing by Catherine Evans