Proportion of Countries with Rising Benchmark Interest Rates
Listed are the main emerging economies, including Taiwan, South Korea, Thailand, the Philippines, Malaysia, India, Indonesia, Vietnam, Brazil, Mexico, Chile, Argentina, Colombia, South Africa, Russia and Turkey.
Central banks with stable financial structure (eg. Taiwan and South Korea) tend to raise interest rates when the economy overheats and to lower interest rates when the economy declines, while economies with feeble financial structure are greatly affected by fluctuations in foreign investment, so the Central banks tend to raise interest rates in times of crises for fear of foreign investment fleeing the country, debt level surging and hyperinflation, as seen in 2008, 2011, 2014, 2016 and 2018.
However, most emerging markets have lowered interest rates in 2020 as a result of the pandemic, after gradually deregulating capitals throughout the past years, increasing credits, and experiencing a wave of rate hikes in 2018, except for Argentina and Turkey whose monetary policy details remain undisclosed.
*Stable financial structure features sufficient foreign reserves, current account surplus, and a low foreign debt to GDP ratio. Feeble financial structure is the opposite.