The intensifying crisis amid the US Iran war has significantly changed the perspective for Asian central banks, as the substantial supply shock presents a challenging trade-off between fostering growth and combating inflation.
For emerging Asian central banks, reducing interest rates has become a precarious gamble, not only due to the additional price pressures from rising fuel costs but also because of the potential for capital outflows resulting from deteriorating trade relations with the United States.
The Reserve Bank of India, for instance, expects placing greater emphasis on promoting growth by maintaining low interest rates.
However, a surge towards the safe-haven dollar, worsened by the US Iran conflict, may force it to increase interventions to support its declining currency for Asian banks.
Share markets see a major decline amid increase in oil prices
Share markets experienced a significant decline, while the safe-haven US dollar strengthened in Asia on Monday, as oil prices exceeded $110 per barrel.
This surge has heightened concerns regarding a prolonged conflict in the Middle East, which could disrupt global energy supplies and lead to increased inflation, potentially compelling central banks to raise interest rates.
The problem is especially highlighted for manufacturing-centric economies such as South Korea and Japan, which rely heavily on global trade, stable markets, and low raw material prices, all of which are being put at risk by the escalating crisis in the Middle East.
Pakistan govt issues cyber security alert for banks
Earlier, Pakistan’s cyber security officials released a high-priority cyber alert regarding potential cyber attacks aimed at government systems, financial institutions, and public digital services.
This alert was issued in the context of escalating regional tensions and a surge in global cyber activity.
Security personnel indicated that attackers may attempt to steal sensitive information, interrupt online services, or disseminate misinformation through digital channels.
The National Cyber Emergency Response Team also stated that vital sectors, including banking, defense, media, and telecommunications, may face an increased risk from cyber threats.
Read more: Govt issues cyber alert: How to save bank account from cyber attack?
