Emerging market central banks have stepped up the fight against inflation and falling currencies, helping emerging market equities stage a nascent recovery after falling back into bear territory in recent days.

India’s central bank surprised investors by raising its policy interest rate 25 basis points early yesterday, while Russia’s central bank intervened in foreign exchange markets to support the rouble. Turkey’s central bank was widely expected to raise interest rates last night, bringing the lira back from an all-time intraday low of 2.39 to the dollar on Monday to 2.26 yesterday.

The MSCI EM index – the most widely followed emerging market index – also staged a minor recovery yesterday, rising to just under 935 points from Monday’s close of 931.6, its lowest since the end of August 2013 and down from its recent peak of 1,044 on October 22. The index has fallen 22 per cent from a previous cyclical peak in early 2011 that marked a rebound for emerging markets from the lows reached during the global financial crisis.