Real, Singapore Dollar May Gain on Inflation Battle, UBS Says

Brazil’s real, the Singapore dollar and Philippine peso may appreciate as central banks let currencies strengthen to keep food-price inflation in check, according to UBS AG.

The Israeli shekel, Chile’s peso and Peruvian sol may also gain against other currencies, Bhanu Baweja, the London-based global head of emerging-market fixed income and foreign exchange strategy at UBS, said in a report.

Policy makers in these countries “would see currency appreciation as helping at least at the margin with imported commodity-price inflation,” Baweja said.

The Turkish lira, Indonesian rupiah and Indian rupee may depreciate, he said.

Rising food prices will probably lead to a widening gap between longer-term interest rates and shorter-term rates in India, China, Thailand, Turkey and Russia, Baweja said.

To contact the reporter on this story: Jason Webb in London at jwebb25@bloomberg.net.

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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