South-east Asia’s central banks now face questions beyond oil shocks – peace deal or not

[SINGAPORE] A tumultuous first half of 2026 has forced the hand of some South-east Asian central banks to tighten monetary policy, as the US-Iran war continues to reveal its full impact on the region’s economies.

Hopes of a peace deal between the US and Iran that could relieve energy costs were dashed as both countries accused each other of breaking a ceasefire and launched new strikes, sending Brent prices up by about 5 per cent on Wednesday (Jul 8).

But analysts told The Business Times that volatile energy prices are no longer the only shock that South-east Asian economies will have to grapple with when deciding their monetary policy.