Bank of Korea to begin easing cycle, oil price risks

With inflation below target and activity data pointing to a further slowdown, we expect the Bank of Korea to kickstart its easing cycle at its scheduled monetary policy meeting next Friday.

Meanwhile, the main channel through which economies in Asia are likely to be affected by the worsening crisis in the Middle East is through rising oil prices, which could cause inflation to rise. However, oil prices would need to rise a lot higher before there was a large impact on regional inflation.