World over, especially in the Emerging Markets (EMs), central banks are gearing up to announce policies, specifically decision on interest rates. Its almost like all are converging together around the same time.

Like India and rest of the world, the central banks arsenal is almost empty. They have used the “lowering of rates” ammunition to the hilt and now, it’s no longer feasible. Like us, almost all across the EMs, inflation is raising its ugly head and these central banks can no longer afford to bring down the rates any more.

Poland had its central bank meet today and they decided to sit tight on the already record low rates, keeping a status quo.

Brazil’s central bank is scheduled to meet tomorrow and there too, the verdict is expected to be status quo.

And it is bound to be status quo on Thursday in Russia, Indonesia and Taiwan.

Except for South Africa, which is expected to announce a rate cut on Thursday, almost all the countries in the EM are going in with no action.

Earlier this month, the central banks of Malaysia, Peru, Ukraine and Chile kept rates unchanged.

The USA Fed Reserve will hold its meet tomorrow night (11.30 PM IST) and with rate already at lowest levels, it will also remain where it is for a long time now. All eyes will be on the inflation target, whether Powell will let inflation overshoot its 2% target and not tighten rates when unemployment falls.

Now India’s central bank, the RBI will announce MPC’s policy decision on the 1st of Oct. And here too at home, the RBI doesn’t have too much to play with any more, most certainly not the interest rates.  And probably this is where the Govt can step in and finally announces something of substance, which can actually be seen as a stimulus and help ease lives, more so for the middle class.

The EM’s story as growth engines is slowing down. Most of these EMs have no scope and willingness to offer anything more. And this absence of a strong story for the future, with policy-easing cycles coming to an end, sends a very strong message – the focus of FIIs will once again be on fining value and value only.