US
EUROPE
AFRICA
ASIAdocument.write(“” + m[today.getMonth()+1]+ ” “+ today.getDate()+”, ” + theYear + ” “);HOMECHINAWORLDBUSINESSLIFESTYLECULTURETRAVELSPORTSOPINIONREGIONALFORUMNEWSPAPERChina Daily PDFChina Daily E-paperChina Daily Global PDFChina Daily Global E-paperBusiness /OpinionEconomyPolicy WatchChina DataCompaniesMarketsIndustriesOpinionMotoringGadgetsGreen ChinaAsian markets ready for taperBy Syetarn Hansakul(China Daily)Updated:2014-02-24 08:08
Comments Print Mail Large Medium SmallThe US Federal Reserve has begun tapering its quantitative easing policy. The Fed started “tapering” or paring its bond buying in December and cut its monthly bond purchases further in January to $65 billion.Thus far, emerging economies in Asia have taken the QE tapering in their stride. Financial markets in Asia reacted much more negatively to the fears of tapering in mid-2013 compared to the actual start of tapering. The impact of the summer “taper tantrum” was particularly acute for India and Indonesia, leading to a fall in asset prices and dampening the growth outlook in those two economies. Nevertheless, neither country – nor any other emerging economy in Asia – had a systemic crisis.WB scenarios for end of taper show China little affected Ripples from US QE exitThis is due not least to the fact that the fundamentals of Asias emerging economies are now much healthier that they were in the 1990s. Debt denominated in local currencies is more common today, thus foreign exchange depreciation causes less harm to domestic balance sheets. Most economies have large foreign exchange reserves and overall comfortable foreign exchange liquidity to serve their external financing needs. External debts are better structured and less vulnerable to external shocks. And bilateral as well as multilateral agreements for currency swap facilities are in place, mitigating risks.Since the tapering of QE began, currencies of Asias emerging economies have held up and some stock markets (in Southeast Asia and Shanghai) have even chalked up gains from the end of 2013. Despite the benign start, vulnerabilities in Asias emerging markets remain and potential pitfalls should be recognized and avoided.The most crucial factor in meeting the QE tapering challenge will be preserving investor confidence in Asias emerging markets by striking a balance between growth and macroeconomic stability with consistent policies and clear market communication. Experts seem to agree that the Fed stimulus is likely to remain substantial and the QE tapering will progress at a moderate pace in 2014, with global interest rates staying low for a while longer.In such a situation, emerging economies in Asia on the whole should be able to cope with the QE tapering without major disruptions. However, any signal that tapering could be faster than anticipated could stoke another round of rapid and large capital outflows from emerging markets, raising risks for financial asset prices and exchange rates in Asias emerging markets with wider impact on the economy and creditworthiness of borrowers.Previous Page1 2 Next PagePrevious Page1 2 Next Page8.03KRelated StoriesEconomic slowdown, US QE tapering frustrate strong yuanUS QE potential risks on emerging marketsQE tapering of little concern for ChinaUS QE policy change risksRipples from US QE exitEnd to QE to split emerging marketsPhotoRetail giant checks outTop 10 Chinese car maker movesEarth hour around the worldWorlds eight green stadiumsHighlights of the Baselworld 2014View from on highChina Economy By NumbersChina Economy by Numbers – Dec China Economy by Numbers – Nov NewsmakerFew textbook answers from Nobel prize winner Things you didnt know about Max BaucusMost ViewedTodays Top NewsNHTSA says finds no defect trend in Tesla Model S sedansWTO rare earth ruling is unfairAmway says 2014 China sales may grow 8%President Xi in Europe: Forging deals, boosting businessCNOOC releases 2013 sustainability reportLocal production by Chery Jaguar Land Rover this yearCar lovers test their need for speed in BMW Mission 3China stocks close mixed MondayHot TopicsTaxi booking appInternet finance12306.cnHousing priceWeChat4GChina MobileIPOs resumptionEditors PicksTop 10 Chinese car maker moves Worry-free financing plans aid car owners What a phone can do via lens 9 mysterious plane disappearances SpecialsGlobal business leaders weigh in on reformsBillionaires speak out on reform rolesInternet finance is in, but is banking out?…Media : |State Administration of Foreign Experts Affairs|QQ International|Peopleforum|workercn.cn|Partners : |State Administration of Foreign Experts Affairs|QQ International|Peopleforum|workercn.cn|Portals : |www.panguso.com|www.goso.cn|Sina|Sohu|Tom|Tencent|NetEase|Hexun|Organizations : |China US Focus|FrenCham|CPAFFC|CPIFA|Gov.cn|eBeijing|AmCham|SwissCham BJ|…| About China Daily | Advertise on Site | Contact Us | Job Offer |Copyright 1995 -. All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.License for publishing multimedia online 0108263             Registration Number: 20100000002731