GRAPHIC-Emerging central banks cut rates in February but there are signs of change

By Karin Strohecker and Ritvik Carvalho
LONDON, March 5 (Reuters) - Emerging market central banks
delivered a net two interest rate cuts in February though signs
are increasing that an easing cycle which started in 2019 might
be coming to an end.
Of a group of 37 central banks across developing economies,
policy makers in Mexico and Indonesia cut interest rates in
February, following a total of one net interest rate cut in
January. For an interactive version of the below graphic, click here
https://tmsnrt.rs/3jSycdO.
The tally between rate cuts and hikes across the group has
been negative or zero since February 2019. This is the longest
easing cycle since the 2008 financial crisis and the 2010 euro
crisis.
Mexico's central bank had cut its benchmark interest rate
for the first time since September, flagging uncertainty over
the economic outlook and global efforts to tackle the COVID-19
pandemic. Policy makers in Indonesia trimmed rates for a sixth time
during the pandemic and eased lending rules in a bid to shore up
its economy while downgrading its 2021 growth forecast.
However, central banks in a number of smaller emerging
markets such as Tajikistan, Armenia, Kyrgyzstan and Zambia
raised rates last month to counter inflation pressures.
"More central banks are turning towards hikes which is the
first step in the reaction to the more inflationary
environment," said Viktor Szabo at Aberdeen Standard
Investments.
At the peak of the easing cycle in March last year, 27 of
the 37 central banks cut interest rates, trying to protect their
economies as the fallout from the coronavirus pandemic rippled
through markets around the world.

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