Asia: Dovish twist in the larger economies – ABN AMRO
|Arjen van Dijkhuizen, senior economist at ABN AMRO, suggests that with slowing Asian growth, downside risks have risen, and the question arises whether policy makers in Asia have sufficient room to lean against the wind and take stabilisation measures if needed.
Key Quotes
“Focusing on the largest economies, we expect the Chinese authorities to continue with cautious monetary easing (the PBoC cuts RRRs by another 100bps this month). We still do not expect aggressive easing though, as the authorities have to continue their balancing act between safeguarding growth at the short term and ensuring an orderly financial deleveraging process over the longer term. Meanwhile in India, we expect a more dovish monetary policy under the new governor Das.”
“We do not foresee a rate hike anymore this year. Should inflation pressures be contained (the real policy rate is currently around 4%) and the current account remains under control, the RBI may even opt for one or more rate cut. In South Korea, we now expect only one (instead of two) rate hikes in 2019.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.