Sign up | Log in



Home  >>   Daily News  >>   Asean News  >>   Economy  >>   IMF pushes Asia to hike interest rates
NEWS UPDATES Asean Affairs  22 October 2010

IMF pushes Asia to hike interest rates

Related Stories

August 30, 2010
ASEAN sets tone for competition

August  25, 2010
Rich-poor gaps haunt Asean

May 7, 2009
Asian lender sees Asean’s partners on recovery track

April 8, 2009
World Bank sees slower growth in emerging Asia

December 14, 2008
Asian powers vow to help revive global economy

The International Monetary Fund (IMF) prodded Asian countries to normalize monetary and fiscal policies amid a buildup in inflationary pressures in the region.

With Asia set to remain an attractive destination for foreign investment given the sluggish recovery in the US and Europe, capital inflows could add further to domestic price pressures in the period ahead, the Washington-based lender said in its Regional Economic Outlook.

"We welcome the steps so far taken by policymakers to control inflation risks and limit the build-up of financial sector vulnerabilities, but more now needs to be done given the continued strong growth in the region," Anoop Singh, director of IMF's Asia and Pacific department, said.

The policy-making Monetary Board of the Philippines Central Bank has kept its overnight borrowing or reverse repurchase and overnight lending or repurchase rates at record lows of four percent and six percent since July 2009 on the back of a manageable inflation path.

The IMF pointed to the need for further tightening of monetary policy in many countries in Asia, including through greater exchange rate appreciation. A faster withdrawal of the fiscal stimulus put in place during the global financial crisis would also help guard against the risks of overheating, it said.

Should a worsening of global economic conditions negatively affect Asia, there is room to return to a more stimulative policy stance, the world's so-called lender-of-last-resort said.

"Managing capital inflows into the region is a difficult challenge. These inflows present many opportunities, but they also pose potential risks to financial stability. Macro-prudential measures have appropriately been taken in many regional economies to minimize risks, but more action may be needed," Singh said.

He said rebalancing Asia's growth remained the top policy priority over the medium term.

With external demand from advanced economies unlikely to return to pre-crisis levels in the foreseeable future, Asia will need stronger domestic demand to continue along a robust growth path, the IMF said.

A broad range of reforms are needed to support domestic consumption and investment, including strengthening social safety nets, ensuring access to credit, easing restrictions in service sectors, and improving infrastructure. Exchange rate appreciation is an important part of rebalancing, the lender said.

"It is only natural that as Asian economies grow stronger so too will their currencies. This is very much a sign of Asia's success," Singh said.

Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
  Online Ad Rates

Comment on this Article. Send them to

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below




1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

Our Products | Work with us | Terms of Use | Site Map | Privacy Policy | Refund Policy | Shipping/Delivery Policy | DISCLAIMER |

Version 5.0
Copyright © 2007-2015 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand