Emerging Europe Economics Update Making sense of the ruble rally The most convincing explanation for the recent rally in the ruble is the fact that the strains in Russia’s balance of payments have eased since the start of the year. Nonetheless, they haven’t gone... 15th April 2015 · 1 min read
Emerging Europe Economics Update Polish MPC shrugs off concerns about deflation and strong zloty Having left the policy interest rate unchanged at 1.5% earlier today, the Polish National Bank’s governor, Marek Belka , dismissed suggestions that the strengthening zloty and March’s weaker-than... 15th April 2015 · 1 min read
Emerging Europe Economics Update Hungary’s Sunday trading ban symbolic of reform backsliding The decision taken by the Hungarian government to ban Sunday trading is unlikely to have a major impact on the economy at an aggregate level. But as we explain in this Watch, it may lead to a shift in... 9th April 2015 · 1 min read
Emerging Europe Economics Update Russia’s 2015 budget: a fiscal squeeze is looming The assumptions underpinning Russia’s 2015 budget, currently working its way through parliament, look realistic, suggesting that the government is finally starting to wake up to the extent of the... 8th April 2015 · 1 min read
Emerging Europe Economics Update Russia’s recession spreading unevenly across the economy The slump in Russia’s economy has been spreading unevenly across various sectors with consumers bearing the brunt of the economy’s problems. By contrast, the hit to the manufacturing sector has so far... 3rd April 2015 · 1 min read
Emerging Europe Economics Update BRICs drive pick-up in EM inflation A pick-up in inflation in all four of BRIC economies pushed aggregate EM inflation to an eight-month high last month. However, the bigger picture remains that in most EMs inflation is both low and... 31st March 2015 · 1 min read
Emerging Europe Economics Update Czech MPC keeps policy unchanged, but hints at loosening Having kept its two-week repo rate unchanged at 0.05% and maintained its exchange rate ceiling of 27/€ earlier today, the Czech MPC’s accompanying statement struck a markedly dovish note. As a result... 26th March 2015 · 1 min read
Emerging Europe Economics Update Hungary: a few more small rate cuts on the cards Having resumed its easing cycle earlier today, the Hungarian MPC made it clear that a few more small rate cuts are likely over the coming months. For now, we have pencilled in 30bp of rate cuts, which... 24th March 2015 · 1 min read
Emerging Europe Economics Update Polish easing cycle at an end, policy to stay extremely loose The Polish MPC was uncharacteristically forthright in its statement that today’s 50bp cut in the policyinterest rate, to 1.5%, marked the end of the easing cycle. But it’s clear that weak price... 24th March 2015 · 1 min read
Emerging Europe Economics Update A looming fall in gas exports adds to concerns in Russia Because Russia’s export gas price seems to follow oil prices with a six to nine month lag, the recent fall in oil prices has not yet fully fed into Russia’s gas export earnings. Admittedly, gas... 20th March 2015 · 1 min read
Emerging Europe Economics Update Ukrainian bonds fall further as debt talks start The start of debt restructuring negotiations in Ukraine has been accompanied by further losses on the country’s foreign currency government bonds. Meanwhile, currencies in Central Europe have weakened... 17th March 2015 · 1 min read
Emerging Europe Economics Update Turkish rates unchanged as government pressure eases The Turkish central bank’s decision to leave interest rates on hold today, rather than cut again, was clearly a response to the latest sell-off in the lira, which has forced President Erdogan to tone... 17th March 2015 · 1 min read
Emerging Europe Economics Update Russian Central Bank cuts rates further Today’s decision by the Central Bank of Russia to cut its benchmark one-week repo rate by 100bps appears to have been driven by the stabilisation of the ruble over the past month. Barring a renewed... 13th March 2015 · 1 min read
Emerging Europe Economics Update Ukraine’s debt restructuring: five key questions It looks all but inevitable that Ukraine will need to restructure its public debts, but there’s a huge amount of uncertainty about what the restructuring might look like. To shed some light, in this... 11th March 2015 · 1 min read
Emerging Europe Economics Update Why Turkish central bank independence matters The Turkish government’s attacks on the central bank (CBRT) have become increasingly aggressive over the past month, raising fears about the independence of monetary policy and triggering a sharp sell... 10th March 2015 · 1 min read
Emerging Europe Economics Update Region’s banks in better shape to weather an external shock The provisional approval of the extension of the Greek bailout has calmed the markets, but the bigger picture is that the road ahead is still long and bumpy. This means that a Greek exit from the euro... 4th March 2015 · 1 min read
