EM central banks move into tightening mode

The recent spate of rate hikes in the emerging world probably marks the start of a sustained tightening cycle over the next 18 months – the first such cycle since 2011. This has more to do with domestic economic conditions than recent currency weakness. But there are a few important exceptions, including China, Russia and South Africa, where we expect interest rates to be lowered over the next 12-18 months.