The Asian Development Bank identified key threats that could affect local currency bond markets and economies in the region.
“Emerging East Asia’s financial conditions remain resilient,” said ADB Chief Economist Albert Park. “But lingering geopolitical tension and adverse climate events pose upside risks to inflation, adding uncertainty over the path of disinflation.” “Some regional monetary authorities may hold interest rates higher for a longer period to safeguard currencies amid the uncertainty in disinflation trends and global monetary stances,” Park said.
In a press event last May 16, ADB noted that BSP Governor Eli M. Remolona Jr. hinted at a possible rate cut in August“The central bank’s decision aims to firmly anchor inflation expectations within the target range amid persistent potential price pressures linked to higher costs of transportation, food, and energy, as well as rising global oil prices,” ADB said in its report.