EM tightening cycle continues
EM central banks continued to tighten monetary policy in August. Policymakers in Argentina and Indonesia raised interest rates to support their currencies amid fears of contagion from the crisis in Turkey. But elsewhere the shift towards tightening has been driven more by concerns about domestic inflation. With inflation pressures set to build in most places, we think monetary conditions will tighten in much of the emerging world over the next 12 months.