Currencies weaken, but EM rate cuts continue

Argentina political developments sparked sharp falls in EM currencies over the past month, but this wasn’t enough to deter policymakers from continuing their easing cycle. Central bankers in Turkey, India, Brazil, Russia, Mexico, Thailand, and the Philippines all cut their key interest rates in recent weeks. Given stable inflation, growing worries about global growth, and looser policy in the developed markets, we expect that the easing cycle will continue over the coming months.