By Leika Kihara and Wayne Cole

(Reuters] – Asian central bankers are easing their long-held reluctances to join their global counterparts in raising benchmark interest rate from their historic lows. The rise of consumer prices is forcing policymakers out of their comfort zones.

It is notable that the economies of the region have not benefited from U.S. or European reopenings after the pandemic. The central banks of Australia, India, and Southeast Asia, up to now, have mostly focused on stabilizing their economies and ignoring the inflation pressures caused global supply problems.

However, this week there was a noticeable shift in the language used by some central banks in the region that are less hawkish due to concerns about the new surge in commodity prices caused by Russia’s invasion in Ukraine. This could lead to destabilisation of their economies.

Australia’s central banks on Tuesday changed their pledge not to be too patient when assessing the current situation. It was widely seen as a sign that they were open to raising interest rates for the first time in more than 10 years.

Michele Bullock, Deputy Governor of the Reserve Bank of Australia (RBA), stated Wednesday that the changes in policy outlook reflect growing inflationary pressures.

Ben Jarman (NYSE:) said that “it seems like external inflation dynamics are sufficient for the RBA pre-emptively flag a shifting,”.

He said that the RBA guidance suggested the upcoming consumer price index as well as labour cost data would clinch normalisation. The RBA forecasted the first rate increase to occur in June, instead of the November prediction.

Globally, rates were raised by the U.S. Federal Reserve last month. This is the first increase since 2018.

Benjamin Diokno, the governor of the central bank in Philippines said Tuesday that he is ready to “pre-emptive” action if inflation expectations are “disanchored.”

He’s not like the passive comments he made in March, when he said that the bank was “ready to react” and followed data which showed consumer inflation pushing towards the top of the central banks projected range. According to analysts, the bank will likely raise its benchmark rate during the second half this year.

On Friday, the Reserve Bank of India won’t likely increase rates. However, inflation exceeding the 6% threshold at the RBI has raised doubts about the bank’s current strategy to keep rates low in order to boost growth.

Last month, Taiwan’s central banks surprised the markets by increasing rates. Some economists predict more increases in 2017.

Krystal Tan from ANZ, an economist, stated that “the big picture is that inflation is becoming more difficult for the region’s central banks after being a non issue in recent years.”

On balance, there are increasing odds that policy rate adjustments will be brought forward.

SHIFTING VIEWS

As surging prices prompted policymakers to shift away from the pandemic-era monetary stimulus, some Asian countries, including Singapore, South Korea and New Zealand have already begun their transitions.

On the opposite end, Asia’s biggest economies are still far away from tightening monetary policy. The Japanese and Chinese central bankers have been slow to pull stimulus but instead focus on driving growth.

Ironically, the emerging Asian market has seen some of the best central bankers in the world – historically the least vulnerable to Fed rate hikes or inflationary shocks.

By containing inflationary pressure, Southeast Asia’s government subsidies have helped to ease pressure on the central banks.

The public commitments of Thailand, Indonesia, and Malaysia to low rates, lowering domestic prices, and recognizing the ongoing threats from global inflation, are not only unwavering.

Last week, Bank Negara Malaysia’s Governor stated that she recognized that the unimaginable conditions that prompted monetary support in the Pandemic were nearly over.

Nor Shamsiah Mohd Yanus stated that with the historical low policy rate, “we are aware of the implications of keeping interest rates low over an extended time period, which could cause an unhealthy buildup of financial imbalances.”