ISMS 16: Top 5 EM Country Interest Rates – Normal China Yield Curve

<h2><strong>Emerging Countries - China and Russia with stable rates, LT rates up only slightly, yield curve inversion less severe except Russia</strong></h2><h3><strong>Interest rate overview</strong></h3><ul><li>China 3m yield 2.5%,&nbsp;India 7.2%,&nbsp;Korea 3.3%,&nbsp;Russia 22.3%,&nbsp;Brazil 13.6%</li><li>China 1yr yield 2.2%,&nbsp;India 7.2%,&nbsp;Korea 3.3%,&nbsp;Russia 10.0%,&nbsp;Brazil 13%</li><li>China 10yr yield 2.9%,&nbsp;India 7.3%,&nbsp;Korea 3.3%,&nbsp;Russia 10.3%,&nbsp;Brazil 13.1%</li></ul><br/><h3><strong>Year-on-year changes</strong></h3><ul><li><strong>3m yield went up in most emerging countries</strong></li><li>China 3m yield was up 0.1ppts,&nbsp;India up 3.4ppts,&nbsp;Korea up 2.1ppts, Russia flat, Brazil up 1.9ppts</li><li><strong>1yr yield increases most prominent in India and Korea</strong></li><li>China 1yr yield was up 0.1ppts,&nbsp;India up 2.9ppts,&nbsp;Korea up 1.6ppts, Russia down 4ppts, Brazil up 0.2ppts</li><li><strong>10yr yield curve hasn’t changed significantly among emerging countries</strong></li><li>China 10yr yield was flat,&nbsp;India up 0.5ppts,&nbsp;Korea up 0.4ppts, Russia down 0.8ppts, Brazil up 1.5ppts</li></ul><br/><h3><strong>Rate progression</strong></h3><ul><li><strong>3m yield was quite stable in developing countries</strong></li><li>Overall, developing countries have been more cautious in adjusted their short-term interest rates</li><li><strong>1yr yield was volatile in Russia over the past year; other developing countries remained flat</strong></li><li><strong>10yr yield almost stayed constant in all emerging countries</strong></li></ul><br/><h3><strong>Yield curve</strong></h3><ul><li><strong>China yield curve remained constant over the past 12 months</strong></li><li>Both short-term and long-term yield haven’t moved much</li><li>As of March 2023, the 10yr yield remained 0.4ppts higher than the 3m yield</li><li><strong>India yield curve flattened massively and looks set to invert</strong></li><li>3m yield almost reached the same level as 10yr yield recently