Emerging market central banks cautious amid global slowdown concerns

Emerging market central banks switched from tightening into easing mode in February, taking their cue from a dovish turn at the U.S. Federal Reserve and a dollar rally that has run out of steam, for now.

Interest rate moves by central banks across a group of 37 developing economies showed three net rate cuts compared to one net rate hike in January. By end-January, interest rate rises by major emerging market central banks had outstripped or matched cuts for nine straight months - the longest such run since the summer of 2011 - as policymakers battled the fallout from a strong dollar, rising inflation and softer currencies that dominated most of 2018.

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

KYRGYZSTAN - Kyrgyzstan's central bank cut its policy rate to 4.50 per cent from 4.75 per cent on Feb. 26, citing deflation and the need to stimulate economic growth.

PARAGUAY - Paraguay's central bank cut its policy rate by 25 basis points to 5 per cent on Feb. 22, saying it considers it "appropriate and timely" to adopt a more accommodating monetary policy to ensure that inflation converges to its 4 per cent target.

JAMAICA - Jamaica's central bank cut its interest rate by 25 basis points to 1.5 per cent on Feb. 20. The bank said the latest rate cut reflects forecasts that inflation will fall below its target range of 4-6 per cent at various points over the next two years.

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 per cent from 16.75 and it's the lending rate to 16.75 per cent from 17.75, it said in a statement, its first-rate cuts since March 2018.

INDIA - India's central bank unexpectedly lowered interest rates on Feb. 6, and as anticipated, changed its policy stance to "neutral" to boost a slowing economy after a sharp slide in the inflation rate. The cut is welcome news for Prime Minister Narendra Modi's government, which wants to boost lending and lift growth as it faces elections in May.

AZERBAIJAN - Azerbaijan's central bank cut its refinancing rate to 9.25 per cent from 9.75 per cent on Feb. 1.

TUNISIA - Policymakers in Tunisia raised the key interest rate to 7.75 per cent from 6.75 per cent to combat high inflation in a third such hike in the past 12 months.