## Global Monetary Policy Update: Rates Held Steady Amid Middle East Tensions 📈

Major central banks largely maintained status quo in March 2026, as geopolitical volatility in the Middle East complicates the global outlook for inflation and growth. • Global Overview Central banks remain cautious due to volatile oil prices and a "bias towards higher inflation and lower growth." Policy stances are currently hovering near neutral in most nations as officials assess the magnitude of recent external shocks. • Developed Markets (DM) • 8 out of 9 central banks held rates steady. • Australia was the sole outlier, raising rates by 25 basis points (bps). • Net YTD tightening for DMs stands at 50 bps. • Emerging Markets (EM) • 10 out of 15 central banks held rates unchanged. • Russia cut rates by 50 bps, while Brazil, Mexico, and Poland delivered 25 bps cuts. • Colombia aggressively hiked by 100 bps, leading to significant domestic policy friction. • Net YTD easing for EMs totals 175 bps (375 bps in cuts vs. 200 bps in hikes). • Impact on Sri Lankan Context While the report focuses on global peers like Indonesia and the Philippines, the cautious global stance on energy prices and interest rates directly affects Sri Lanka's import costs and debt servicing environment. Heightened uncertainty continues to delay aggressive easing cycles across the ICT/BPM and apparel export-linked economies. _Note: Summary based on provisional global policy data as of March 2026._