How Asia Has Managed To Keep Rates Low In The Face Of Rising Inflation

Summary

• In Central and Eastern Europe, rising inflation against the backdrop of re-opening economies and supply constraints has led to central banks aggressively hiking policy interest rates.
• This experience is not on the whole being mirrored in Asia. Where rates have gone up, they have gone up much less rapidly. And where they’ve not yet increased, central banks are often still hanging on to a stance of growth support and taking their time to shift to normalisation.
• So why aren't we seeing crazy Asian rates? What explains this divergence in policy between these two regions?

CHUNYIP WONG/E+ via Getty Images

By Robert Carnell, Iris Pang, Nicholas Mapa

*What is Asia 10?

Asia 10: China, HK, India, Indonesia, Japan, Korea, Malaysia, Philippines, Taiwan, and Thailand

CE3 = Hungary, Czech Republic, Poland

(Simple average of cumulative