Analysts state that the Middle East conflict and rising oil prices could push emerging markets towards more "hawkish" monetary policies. Over the next two weeks, more than a dozen emerging market central banks are scheduled to hold meetings to discuss their monetary policies. Goldman Sachs analysts noted, "The markets under the most pressure are those where investors had anticipated interest rate cuts in Central and Eastern Europe, the Middle East and Africa, and Latin America. These markets also tend to be highly sensitive to global supply-side shocks." Due to the Iran conflict, global financial markets fear a spike in oil prices, which could lead to consumers facing higher costs. Asian emerging economies, including India, are major oil importers and are vulnerable to supply shocks. An escalation of the conflict with Iran could pressure external balances, currencies, and capital flows. J.P. Morgan analysts indicated that an "oil price shock" could lead to more hawkish policy outcomes in Indonesia, the Philippines, and Singapore. They also suggested that the Reserve Bank of India might "stay on hold for longer" due to rising crude oil prices. Brent crude was last trading at $83.47 per barrel, up over 2%. Morgan Stanley said, "Developed market Asian central banks might accommodate supply shocks (refraining from further tightening for now), but some emerging market Asian central banks may be unable to cut rates."
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