Trade war sell-off unlikely to halt EM easing cycles

The falls in EM currencies in this latest leg of the trade war have been large compared with previous episodes. If this turbulence continues, a few EM central banks (e.g. in Indonesia and Mexico) would probably postpone interest rate cuts and one or two (e.g. Colombia) could hike rates. However, most major EM central banks are likely to continue easing monetary policy in the coming months.

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