Inflation Is Becoming a Problem for Emerging Markets
- Czech Republic, Brazil report price rises above expectations
- Most central, east European countries have negative real rates
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Even as a number of central and east Europe’s monetary authorities have embarked on tightening cycles, they’re falling behind the curve, at least if real interest rates are anything to go by. That could weigh on the region’s currencies as developed nations start normalizing policy.
Price increases in the Czech Republic and Romania accelerated more than economists’ expectations in October, data showed Wednesday, plunging their real rates deeper into negative territory. And they’re not the only ones in the region with below-zero real rates.