People walks near the fountain of Indonesia's central bank, Bank Indonesia, in Jakarta, Indonesia, on Jan 19, 2017.SINGAPORE - Having bucked a global dash to tighten monetary policy for a year, Asian central banks find themselves scrambling to catch up in order to tackle rising inflation and defend weakening currencies.
While relatively subdued inflation allowed central banks in Asia to remain dovish in a bid to support the post-pandemic economic recovery, that led to weakening currencies and capital outflows, even as the war in Ukraine exacerbated price pressures globally. Currencies and bonds have borne the brunt. Among the worst hit, the Philippine peso is down more than 10 per cent year-to-date, and just off a nearly 17-year low of 56.53 per dollar. Yields on the country's government bonds have spiked about 200 basis points since the start of the year.
Even South Korea, which began raising rates as early as August 2021, saw prices hit a 24-year high in June, triggering a record half-point rate hike last week.
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Source: ChannelNewsAsia - 🏆 6. / 66 Read more »