Inflation pressure rises again, calling into quest

Ai Huicha, September 6: Recent increases in food and energy prices in emerging Asian countries have raised the prospect that policymakers may have to raise interest rates again. Foreign participation in Indonesia's primary bond auction fell to its lowest level in three months on Tuesday after outflows from the local currency bond market, a bellwether for risks in emerging Asia, rose to a six-month high in August. Outflows from the Thai bond market also climbed, with foreign purchases of South Korean bonds falling to the lowest since February. The resurgence of inflationary pressures comes at a bad time for global investors who are already grappling with the reality that the Federal Reserve is likely to keep interest rates higher for longer. Rajeev De Mello, global macro portfolio manager at Gama Asset Management SA in Geneva, said: "In a broader inflation environment, higher food inflation or other inflation shocks could exacerbate the second-order effect and lead to policy rates remaining at the same level for longer. higher level."