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BANDAR SERI BEGAWAN: Brunei Darussalam Central Financial institution (BDCB) expects the nation’s inflation to stay low regardless of the worldwide worth hike brought on by geopolitical rigidity.
In accordance with the BDCB’s semi-annual coverage assertion launched on Saturday on its web site, the BDCB famous that the Worldwide Financial Fund had revised its 2022 international development forecast from 4.4 to three.6 % attributable to Russia-Ukraine battle spillover results, akin to provide shocks and better international inflation.
In the meantime, the home economic system contracted by 1.6 % in 2021, the BDCB mentioned.
“Regardless of the worldwide inflation forecast which is predicted to stay elevated, mixed with disruptions on international provide chains that are more likely to persist within the near-term, the BDCB expects its impacts on the nation’s total inflation to be low given the tightening of Financial Authority of Singapore’s financial coverage thrice thus far within the first seven months of the yr,” the BDCB mentioned.
The BDCB’s inflation forecast within the coverage assertion for 2022 is within the vary of two to three %.
Brunei’s financial system relies on the Forex Board Association, which is underpinned by the Forex Interchangeability Settlement between Brunei and Singapore.
Because the native forex, Brunei greenback is pegged to the Singapore greenback at par, Singapore’s financial coverage has a direct affect on financial circumstances in Brunei.
The BDCB’s earlier assertion mentioned that inflation within the Sultanate had been low and secure, averaging 1.2 % over 1981-2018.
Nevertheless, the most recent official statistics launched earlier this month confirmed that Brunei’s inflation in March 2022 elevated by 3.8 % yr on yr, primarily attributable to greater import costs of cooking oil, meat and different meals.
The BDCB additionally recorded a development within the monetary sector, with complete property growing 7.9 % yr on yr and a complete worth of 23.9 billion Brunei {dollars} ($17.2 billion) as of the primary quarter of 2022.
The Islamic finance sector held 58 % with 13.9 billion Brunei {dollars}, whereas deposit-taking establishments made up 92 % of the whole monetary sector property with an asset base of twenty-two billion Brunei {dollars}.
“However, attributable to heightened uncertainties related to the Covid-19 pandemic, in addition to the nonetheless comparatively low international curiosity/revenue charges atmosphere, profitability of the banking business has additionally declined,” the BDCB mentioned.
Presently, 1 Brunei greenback is the same as $0.72.
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