Capital Economics’ Gareth Leather says rising El Nifio-driven food price risks
make Asian central banks unlikely to quickly reverse recent rate hikes. Many
central banks responded aggressively to the earlier energy shock, with most
hiking at least once; while lower energy prices have eased the urgency for
further tightening, food carries a higher weight than energy in Asian consumers
baskets, so El Nifio could keep policymakers cautious. Capital Economics
continues to expect further tightening in India, Pakistan and South Korea over
the coming months.
