The weekly wrap 2-3
Welcome to our inaugural edition of CEEMEAnomics, our weekly look at economic and policy developments in the
CEEMEA region. This week, among other things, we look at how central banks are responding to the ‘currency wars’.
THEMES OF THE WEEK
Poland: No case for a pause in the easing cycle 4-5
Poland’s MPC statement and comments were more hawkish in February, suggesting it is considering a pause in the
easing cycle. However, the economic data will call for a cut in March, in our view, as well as further easing in Q2.
Russia: The currency that came in from the cold 6-7
The CBR continues to liberalise Russia’s FX regime and to scale back its intervention in the market. RUB volatility
has risen. The CBR tolerates it, though, as it helps to limit speculative inflows and prevent overheating.
Turkey: Monetary policy comes in threes 8-9
The CBRT has been on the front line of the currency war, adopting a softer-than-otherwise interest-rate policy in a
bid to limit appreciation pressure on the TRY. Inflation and the current-account gap are still the key risk factors.
South Africa: Social unrest and the weakening rand 10-11
Since August, the ZAR has weakened 10% against the USD. The impact of continued social unrest on the currency
has been much greater than in the past and is set to remain a key threat to the ZAR in the months ahead.
Saudi Arabia and the UAE: A good start to 2013 12
In Saudi Arabia, bank lending to the private sector grew 16.5% y/y in December, its fastest rise since February
2009. January PMI readings for Saudi and the UAE show expansion of the non-oil-producing private sectors.