Rising oil prices could deal another blow to Asia’s economies, already grappling with a slowing Chinese economy, weak export growth and an outflow of foreign funds amid expectations for an unwinding of U.S. monetary stimulus.
“The problem is for emerging markets, which will be hit by high oil prices,” Mark Matthews, head of research for Asia at Bank Julius Baer, told CNBC.
“They are already going through a hard time right now with the rising [government bond] yields in the U.S., so it [the high oil price] would be another pressure point for emerging markets,” he added.
Emerging markets which include Asian countries such as India and Indonesia have seen heavy outflows of foreign cash in recent weeks amid fears that the Federal Reserve could start to take back some its monetary stimulus this year.
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