Europe, Middle East and Africa Emerging Markets Weekly

Research evidence excerpt

Europe, Middle East and Africa Emerging Markets Weekly

J P M O R G A N Europe Economic Research

20 July 2026

Europe, Middle East and Africa

Emerging Markets Weekly

EMEA Central Banks: proceed with the plan EM, Economic and Policy Research

The resurfacing of tensions in the Middle East and the associated rise in energy Nicolaie Alexandru-Chidesciuc

prices is being closely watched by policy-makers, but for now we note is not (44 20) 7742-2466

sufficient to divert near-term action from the original plans. This week, we expect nicolaie.alexandru@jpmorgan.com

J.P. Morgan Securities plc

the CBRT to resume one-week repo auctions on 23 July, lowering the effective

funding rate from 40% to 37%, for two main reasons. First, although renewed Jose Cerveira

(44-20) 7742-3556

escalation in the Middle East has lifted Brent crude oil prices to about $85/bbl, the jose.a.cerveira@jpmorgan.com

CBRT’s FX reserve accumulation over the past three weeks suggests the external J.P. Morgan Securities plc

backdrop is unlikely to pose a binding constraint on rate decisions. Second, the Sonja Keller

CBRT appears to assess the monetary stance as restrictive: monetary policy is (27-11) 507-0376

moderating domestic demand, and the slowdown is becoming increasingly evident sonja.c.keller@jpmorgan.com

in recent activity data. We also anticipate hawkish forward guidance, with the JPMorgan Chase Bank, N.A., Johannesburg

Branch

CBRT emphasizing a meeting-by-meeting approach rather than signaling the start

Anatoliy A Shal

of a rate cutting cycle. In Hungary, the NBH counts with an extra month of soft CPI

(971) 4561-2005

data, and will deliver a pre-committed 25bp cut to the policy rate (to 5.75%), albeit anatoliy.a.shal@jpmorgan.com

with a more hedged/cautious message in terms of guidance.