2021-12-07-牛津经济研究院-APAC_Regional_monetary_policies_to_continue_to_diverge_in_2022_4页_233kb

Asia Pacific Monetary Policy Divergence in 2022 Summary

Main Expectations

• APAC monetary policy will continue to diverge in 2022, with advanced economies leading by normalizing policies after accommodative stances from post-pandemic 2020.
• Factors include inflation risks, economic growth priorities, and the potential impact of the Omicron variant, with most central banks likely to prioritize growth over inflation control.

Specific Policy Move Predictions

• Advanced APAC Economies (excluding BoJ and RBNZ): Further policy normalization, with hikes in Korea, NZ, and India; US Fed expected to taper asset purchases and raise rates by Sep 2022.
• Emerging SE Asia: Delays in rate hikes to avoid currency depreciation; India to consider early 2022 rate increase if inflation rises.
• Other Economies:
  • Japan: Lags due to persistent undershooting inflation target.
  • Australia: Cashes rate likely unchanged in 2022.
• China: Shifts to more accommodative policy, e.g., reserve ratio cuts, with interest rate rises unlikely due to financial risk concerns.
• Most APAC central banks are cautious, expecting economic recovery slack to delay tightening beyond 2022.

Key Influences

• Omicron variant introduces uncertainty on demand vs. supply chains, potentially disinflationary or inflationary.
• Continued divergence ensures diverging timelines for policy normalization, with APAC currencies expected to strengthen amid resilience to US taper effects.