Feb. 8 (Bloomberg) -- 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.
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