Many central banks in Asia are likely to further tighten their monetary policy in 2H, amid risks driven by El Nino and artificial intelligence, HSBC economists say in a note. In India, El Nino risks are expected to lift food inflation, hitting rural workers and urban informal workers. The Philippines and Thailand are also exposed to such risks, given their reliance on imported fertilizers. Meanwhile, the AI boom's wealth effects, especially in highly exposed economies including Taiwan and South Korea, are widening a K-shaped divide. HSBC expects New Zealand, India, Indonesia, Japan, South Korea, the Philippines, Singapore, Taiwan, and Vietnam to raise their policy rates in 2H.(amanda.lee@wsj.com)
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Asian Central Banks May Raise Rates on Risks From El Nino, AI — Market Talk
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Many central banks in Asia are likely to further tighten their monetary policy in 2H, amid risks driven by El Nino and artificial intelligence, HSBC economists say in a note. In India, El Nino risks are expected to lift food inflation, hitting rural workers and urban informal workers. The Philippin…