Summary

• The peace deal and partial resumption of oil flows reduce near-term inflation risks, giving some central banks (notably Taiwan and India) room to delay tightening.
• However, a broad pivot remains premature, as still-elevated oil prices, rising food price risks, and second-round effects keep the policy stance asymmetric and biased towards caution.
• Given China’s general stability, we are not making substantive changes to the GDP growth forecast of 4.7%.

By Deepali Bhargava, Lynn Song & Min Joo Kang

Supply relief and sentiment boost

The US–Iran peace deal should come as a significant relief for Asia, given its heavy reliance on imported energy and vulnerability to