Activity in EM’s central banks this week – BBH

Analysts at BBH highlighted the upcoming central bank meetings in the EM space.

Key Quotes

“COPOM meets Wednesday and is expected to cut rates 75 bp to 7.5%.  IPCA inflation was 2.5% y/y in September, right at the bottom of the 2.5-6.5% target range.  Price pressures are picking up, and so we see one last 50 bp cut at the December 6 meeting for a terminal SELIC rate of 7%.  Brazil then reports September current account, FDI, and central government budget data Thursday”. 

“Central Bank of Turkey meets Thursday and is expected to keep rates steady.  Inflation was 11.2% y/y in September, well above the 3-7% target range.  Yet the bank will be under great pressure not to tighten any further.  We expect further erosion of confidence in the nation’s institutions as a result”.

“Central Bank of Russia meets Friday and is expected to cut rates 25 bp to 8.25%.  A small handful of analysts look for a 50 bp cut.  Inflation was 3% y/y in September well below the 4% target.  While a bigger move is possible, we think the bank will play it safe with a 25 bp cut and follow up with another cut at its next meeting December 15”.

“Colombia central bank meets Friday and is expected to keep rates steady at 5.25%.  The bank remained on hold in September as inflation ticked higher to 4% y/y.  However, official comments suggest this is just a pause in the cycle.  The next meeting after this one is November 24.  Timing of the next cut will be very data dependent”.