General News
Crude Oil Tops $100 per Barrel, Pushing Global Inflation Concerns
Global inflationary pressures have heightened significantly since the last MPC meeting, driven largely by elevated energy costs with crude oil prices, currently slightly above US$100 per barrel.
Global climate conditions have also added another layer of uncertainty to the inflation outlook, with expectations of a strong El Niño developing in the last quarter of the year.
Together with global supply chain constraints, this could adversely impact food prices and exert additional inflationary pressures.
Based on these developments, most central banks have shifted from a cautious policy stance to modest tightening, alongside elevated long-term bond yields.
So far, the US Federal Reserve, the European Central Bank, and the Bank of Japan have raised their policy rates, on account of persistent inflation while signalling possible further tightening based on the inflation trajectory.
These policy actions could, in the near to medium term, increase global yields and tighten global financing conditions with adverse consequences for emerging market and frontier economies.