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Tale of two EM countries against inflationary forces - BBH

FXStreet (Delhi) – Research Team at BBH, suggest that it was a tale of two EM countries in terms of inflation as Colombia reported higher than expected inflation, while the Philippines reported lower than expected inflation.

Key Quotes

“The monetary policy trajectories are also divergent. Colombia reported inflation at 5.35% y/y, well above 5.0% consensus and even further above the 2-4% target range. We did not think an aggressive tightening cycle would be seen, but the data may push the central bank into front-loading it more.”

“On the other hand, Philippine inflation of 0.4% y/y is well below the 2-4% target range. Even though the bank has been on hold since its last 25 bp hike in September 2014, rising deflation risks suggest the bank may have to tilt more dovish in the coming months.”

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