Oil prices have surged past $90 a barrel, forcing emerging market central banks to pause rate cuts and confront renewed inflation pressures, economists warn. Before the conflict, many developing nations were poised to stimulate growth by lowering borrowing costs after years battling high inflation. But the 15 per cent Selic rate in Brazil and Turkey's 37 per cent benchmark rate now signal a strategic shift.

Investors expect central bankers to monitor how the crude spike translates to consumer prices, wary of repeating the 2022 energy crisis impacts when developed market rate hikes pulled capital away. Egypt's currency crisis exemplifies the vulnerability, with offshore debt holdings peaking at $32bn before the conflict, triggering a pound collapse after investor outflows. Turkey's central bank intervened to stabilize the lira, raising the overnight rate by 300 basis points to 40 per cent, though analysts suggest its stronger reserves position now offer better protection. Emerging markets are better equipped than in 2022, but the 20 per cent yield on Egypt's debt and lingering uncertainty underscore the fragile recovery.