Emerging market assets slide as oil jumps and central banks shift course

Oil prices are climbing again. Central banks are changing direction. That’s hitting emerging markets hard this week.

Central banks split on next moves

There’s no single playbook. India just ended its rate-hike pause. The central bank raised its repo rate by 0.25 percentage points. That’s the first increase since 2023. In contrast, Poland and Kenya are holding rates steady. Their central banks want to see how energy prices and global tensions affect inflation before acting. Currency markets are jittery. Traders are glued to policy meetings. Uncertainty rules.

A Reuters survey says the Reserve Bank of India expects inflation to average about 5% this fiscal year. Most economists see another rate hike coming in December. The World Bank has lifted its 2026 growth forecast for South Asia to 6.9%. So far, higher energy prices have not stopped people in the region from spending. Central banks are walking a tightrope. They must juggle local and global pressures.World Bank growth forecast

Senegal’s debt crisis in the spotlight

Senegal is now at the center of attention. Next week, the International Monetary Fund meets in Bangkok. Reuters reported $13 billion in previously hidden debt. That’s a shock. Senegal’s officials and bondholders are racing to reach an “agreement in principle” by December. This deadline will shape how investors value Senegal’s dollar bonds. The government told creditors it wants a deal with both official lenders and bondholders by December 2026. Talks are happening under the G20 Common Framework. Senegal has also asked for debt restructuring. At its first meeting with investors, the government called for a "constructive contribution" on 1 trillion CFA francs (about $1.72 billion) tied to total return swap operations. First Abu Dhabi Bank, Africa Finance Corporation, and Société Générale are named as counterparties.Reuters financial review