In this episode of The Global Economic Pulse, we explore why inflation affects developing economies more severely and unpack the challenges central banks in these regions face. The episode is split into three parts. First, we examine the key drivers of inflation, stemming from domestic and international shocks, focusing on how exchange rate volatility amplifies external pressures. In the second part, we discuss the hurdles central banks encounter, such as weak transmission mechanisms due to informal economies, underdeveloped financial markets, and fiscal dominance that compromises central bank independence. Finally, we offer policy recommendations, including targeting headline inflation and developing domestic bond markets to enhance economic resilience.