SINGAPORE/SEOUL/JAKARTA (March 31): As Brazil, Russia and Turkey lift interest rates to ward off inflation and currency pressures, investors are beginning to prod Asia's central banks to follow suit, setting up a potential showdown with countries keeping rates at record lows. The moves also open a gap against benchmark US short-term rates, which have barely moved and, now that Brazil, Russia and Turkey have made unexpectedly bold hikes, leave Asia's central banks lagging both their peers and the market. "Asia central banks now need to be a bit more cautious," said Sonal Varma, chief economist for Asia ex-Japan at Nomura in Singapore, with historically low rates in the region and "choppy" global capital flows. Asia's central bankers have so far held firm, and, to be sure, a slew of investors and advisors think rates markets have run too far ahead. "In my view, investors are drawing incorrect parallels between now and recent past episodes of rate hike cycles," said Nader Naeimi, head of dynamic markets at AMP Capital.

Source: The Edge Markets March 30, 2021 22:52 UTC