EM equities to underperform in 2022 on central bank policy action: Analysts

While most analysts see monetary policy normalisation across the world in 2022, rate trajectories are likely to diverge across geographies, they said

Emerging Market (EM) equities that have been accustomed to the ‘easy money’ policy of the major global central banks to stem the impact of Covid pandemic in the past 18 months may come under pressure over the next few months, as these central banks begin to unwind their policies, said analysts.

While the US Federal Reserve (US Fed) has announced a faster tapering (starting January) of its asset purchase program amid rising inflation, Bank of England (BoE) hiked its main interest rate to 0.25 per cent last week as inflation pressures mounted – the first major global central bank to