«Should significant further pressure be exerted on capital flows out of South Africa, and as a result on the rand, the additional
imported inflation pressures can lead to an unexpected resumption of interest rate hiking, which could curb residential demand and thus house price growth once more.
At any rate, India and Brazil will most probably have to raise their interest rates to reduce their high inflation, and to prop up their currencies to stem
imported inflation pressures.
Not exact matches
Strong export,
import and
inflation data from the U.K. in recent months have also reduced the likelihood of further monetary policy easing from the Bank of England (BOE) and should consequently alleviate some
pressure on sterling, according to research sent to clients from Singaporean bank, DBS, on Wednesday.
In contrast, core
inflation, which strips out the most volatile
inflation components, is facing upward
pressure because recent declines in the exchange rate are boosting the prices of
imported goods.
The net effect of higher
import prices and continued subdued domestic inflationary
pressures is likely to be a moderate rise in
inflation during the period in which
import prices are adjusting.
The effects of rising
import prices on
inflation diminish over the next few years, and domestic inflationary
pressures gradually pick up as spare capacity is absorbed and wage growth recovers.
Core
inflation continues to be near the 2.0 % target as the past decline in the Canadian dollar puts upward
pressure on
imported products, which has been largely offset by the deflationary effect of excess capacity.
In contrast, core
inflation, which strips out the most volatile
inflation components, is facing upward
pressure because recent declines in the exchange rate are boosting the prices of
imported goods.
At its worst, the imposition of tariffs on U.S.
imports could lead to tariffs on U.S. exports, higher
import prices, and greater
pressure on
inflation as well as smaller markets for U.S. exporters.
Upward
pressure on wage rates associated with tight labor markets, the impact of new fiscal policies, and the threat of rising tariffs on
imported goods into the U.S. could very likely push
inflation past the Fed's targeted 2 % goal.