Senior IMF Official: Middle East Conflict Escalation May Affect Oil Prices, Impact Asian Nations

The Director of the International Monetary Fund (IMF) Asia and Pacific Department issued a warning on Wednesday, stating, “the escalation of the Middle East conflict may impact oil prices, affecting numerous Asian countries.”

Additional Statements:

  • “Asian central banks might consider the possibility of easing monetary policy later this year as inflation shows signs of moderation.”
  • “Average inflation in Asia dropped to 2.6% in 2023 from 3.8% in 2022, with notable progress in emerging economies.”
  • “Many regional central banks are on track to achieve their inflation targets in 2024. If policymakers maintain stability until inflation is securely re-anchored, the potential for monetary easing may emerge later in the year.”
  • “Divergences, including China’s near-zero price growth last year, raising concerns about deflation, and Japan’s inflation likely remaining above the central bank’s 2% target until 2025.”
  • “There is a risk that divergent monetary stances in the United States and in Asia could trigger sharp exchange rate movements this year.”
  • “The escalation of the Middle East conflict could impact oil prices, affecting many Asian countries.”
  • “Had constructive discussions on exchange rates with Japanese authorities, who expressed commitment to flexible exchange rates as shock absorbers.”
  • “Foreign exchange intervention could reduce excess volatility and better align exchange rate movements with fundamentals.”

Japanese Yen edges lower against USD, remaining within a familiar range ahead of FOMC.

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