Capital Economics senior Asia economist Gareth Leather says El Nifio-driven upside food-price risk makes Asian central banks unlikely to rush to reverse recent rate hikes. While many central banks had already responded aggressively to earlier energy-driven inflation and have hiked at least once, falling energy prices eased some urgency to tighten; El Nifio could keep them cautious given food’s heavier weight in Asian CPI versus energy. Capital Economics still expects India, Pakistan and South Ko

Capital Economics senior Asia economist Gareth Leather says El Nifio-driven upside food-price risk makes Asian central banks unlikely to rush to reverse recent rate hikes. While many central banks had already responded aggressively to earlier energy-driven inflation and have hiked at least once, falling energy prices eased some urgency to tighten; El Nifio could keep them cautious given food’s heavier weight in Asian CPI versus energy. Capital Economics still expects India, Pakistan and South Korea to tighten policy further in the coming months.