Asia Weekly Watch: Inflation prompts more tightening

Although inflation rates may have already peaked in a number of countries, monetary tightening is continuing, as seen this past week in two of the region´s giants, namely China and India. Given ongoing inflation pressures, the central banks in both countries took steps this past week, including another 50 bp increase in the Reserve Requirement Ratio in China and a 25bp increase in interest rates in India (see Highlights). In China, although inflation continues to rise, a batch of monthly activity data helped alleviate concerns of a hard-landing.

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