Real policy rates in six emerging markets range from 1.0 to 7.6 percentage points

Policy rates at six central banks in Türkiye, the Caucasus, Central Asia and Egypt stand between 1.0 and 7.6 percentage points above the latest annual inflation rate, a Data Desk calculation from each bank's current rate and the newest statistics-office reading. Uzbekistan has the widest gap, with a policy rate of 14 per cent and inflation of 6.4 per cent in September. Azerbaijan has the narrowest, with a refinancing rate of 6.5 per cent and inflation of 5.5 per cent. Five of the six banks decide again between 21 and 29 October.

The six gaps

The measure subtracts the latest annual headline inflation rate from the main policy rate. It ignores expectations and differences between instruments, so it is a guide to stance rather than a precise ranking. The gaps are listed from widest to narrowest, with the August comparison in each line.

• Uzbekistan, 7.6 points: the 14 per cent policy rate less September inflation of 6.4 per cent. August inflation of 6.2 per cent gave 7.8 points.
• Türkiye, 7.27 points: the 37 per cent one-week repo rate less September inflation of 29.73 per cent. August inflation of 31.51 per cent gave 5.49 points.
• Kazakhstan, 6.95 points: the 16.25 per cent base rate less September inflation of 9.3 per cent. Before the 4 September cut, the 16.75 per cent rate less August inflation of 9.8 per cent also gave 6.95 points.
• Egypt, 5.1 points: the 19.00 per cent overnight deposit rate less September urban headline inflation of 13.9 per cent. August inflation of 14.5 per cent gave 4.5 points.
• Georgia, 2.65 points: the 8.25 per cent policy rate less September inflation of 5.6 per cent. August inflation was also 5.6 per cent, so the gap is unchanged.
• Azerbaijan, 1.0 point: the 6.5 per cent refinancing rate less September inflation of 5.5 per cent. August inflation of 5.7 per cent gave 0.8 points.

Gaps that moved without a rate change

Kazakhstan was the only one of the six to change its main rate between the August and September inflation readings. Its cut of 50 basis points matched the half-point fall in annual inflation, leaving the gap at 6.95 points. Azerbaijan lowered the floor of its corridor to 5 per cent on 24 September but left its refinancing rate at 6.5 per cent, according to the central bank. The other four held.

Elsewhere the gaps moved because inflation did. Türkiye's widened by 1.78 points with the rate fixed at 37 per cent, as annual inflation fell to 29.73 per cent from 31.51 per cent, a Data Desk calculation. The central bank's summary of the September meeting said that the early announcement of Hajj fees and the split of university tuition increases between August and September added about 0.25 percentage points to August inflation and would mechanically lower the September reading. Egypt's gap widened by 0.6 points and Azerbaijan's by 0.2 points as inflation eased, while Uzbekistan's narrowed by 0.2 points as inflation edged up from 6.2 per cent to 6.4 per cent.

Two cautions apply. Realised inflation is not what households expect: the National Bank of Kazakhstan's household survey put median expected inflation over the next 12 months at 11.8 per cent in September, 2.5 points above the realised 9.3 per cent. And policy rates are not always money-market rates: Azerbaijan's interbank benchmark, AZIR, was 5.80 per cent on 15 October, according to the central bank's website, which would put the money-market gap at 0.3 points against September inflation, a Data Desk calculation.

Five decisions between 21 and 29 October

Each date below comes from the bank concerned, together with its most recent signal on direction.

• 21 October, Georgia: the date is set out in the 9 September statement, in which the bank said it would continue to raise the rate moderately if prolonged supply shocks push up inflation expectations.
• 22 October, Türkiye: the committee meets on the date in the bank's calendar, and its own survey of market participants points to a cut of 100 basis points to 36.0 per cent.
• 23 October, Kazakhstan: the decision is due at 12:00 Astana time, the bank said, and the committee's median projection implies a further 25 basis points of easing by the end of the year, according to its summary of deliberations.
• 28 October, Uzbekistan: the board meets on the date given in the 16 September release, which restated tight monetary conditions and a 5 per cent inflation target by the end of 2027.
• 29 October, Azerbaijan: the bank brought forward its next corridor decision from 4 November.

A cut leaves a gap narrower unless inflation falls by as much, and a hold widens it if inflation keeps easing, as it did in Türkiye in September.