Rates to remain low as virus disruption worsens

Surging infections across South East Asia and the slow progress of vaccine rollouts mean that COVID-19 will continue to cause widespread economic disruption across large parts of the region until at least the end of the year. We have cut our GDP growth forecasts for a number of countries. Interest rates in many countries are at record lows. Whereas the consensus and financial markets are expecting many central banks to start tightening policy in 2022, we think rates will remain at their current levels in most countries until at least the end of next year. Korea is an important exception. Tightening there is imminent.