Asian bankers hope to escape US woes
Tuesday, 25 March 2008
John Aglionby
FT Syndication Service
JAKARTA: Buoyant intra-regional trade and robust domestic demand should cushion south-east Asia's economies from the worst impact of any US economic downturn, the region's central bankers said after their annual conference in Jakarta at the weekend.
Slowing demand from developed nations and the weakening US dollar would, however, leave regional economies vulnerable to "downside global risk", the bankers said in a communiqué at the end of their two-day meeting.
Excessive market liquidity and complexity resulting from "financial deepening initiatives" that were "not accompanied by adequate surveillance and strong regulatory framework" also posed concerns and would necessitate improved market supervision, the central bankers said.
The governors represented 18 countries, from Mongolia and South Korea in the north to Sri Lanka and Fiji in the south, but not China, Japan or India. They highlighted the increasingly diverse structure of the grouping's economies and expected this to continue in spite of recent international financial turbulence.
Their statement was, however, mostly an economic commentary and gave little indication of any action they might take. Burhanuddin Abdullah, the Bank Indonesia governor and host, told reporters that he and his fellow bankers "must work to secure macroeconomic stability and sustain economic growth amid the global economic slowdown".
The forecasts come as western central bankers and politicians struggle to reduce volatility in markets as the global credit crunch shows little sign of easing and their markets suffer from insufficient liquidity.
The dollar slumped last week to a record low against the euro and a basket of currencies, and touched a 13-year low against the yen before staging a slight recovery.
Most east Asian currencies have appreciated against the dollar this year - the Thai baht leading the way with a 7.9 per cent gain.
While global growth is likely to weaken this year and next, "there has been limited impact of the US financial crisis thus far on the Asian economies", the central bankers' statement said.
FT Syndication Service
JAKARTA: Buoyant intra-regional trade and robust domestic demand should cushion south-east Asia's economies from the worst impact of any US economic downturn, the region's central bankers said after their annual conference in Jakarta at the weekend.
Slowing demand from developed nations and the weakening US dollar would, however, leave regional economies vulnerable to "downside global risk", the bankers said in a communiqué at the end of their two-day meeting.
Excessive market liquidity and complexity resulting from "financial deepening initiatives" that were "not accompanied by adequate surveillance and strong regulatory framework" also posed concerns and would necessitate improved market supervision, the central bankers said.
The governors represented 18 countries, from Mongolia and South Korea in the north to Sri Lanka and Fiji in the south, but not China, Japan or India. They highlighted the increasingly diverse structure of the grouping's economies and expected this to continue in spite of recent international financial turbulence.
Their statement was, however, mostly an economic commentary and gave little indication of any action they might take. Burhanuddin Abdullah, the Bank Indonesia governor and host, told reporters that he and his fellow bankers "must work to secure macroeconomic stability and sustain economic growth amid the global economic slowdown".
The forecasts come as western central bankers and politicians struggle to reduce volatility in markets as the global credit crunch shows little sign of easing and their markets suffer from insufficient liquidity.
The dollar slumped last week to a record low against the euro and a basket of currencies, and touched a 13-year low against the yen before staging a slight recovery.
Most east Asian currencies have appreciated against the dollar this year - the Thai baht leading the way with a 7.9 per cent gain.
While global growth is likely to weaken this year and next, "there has been limited impact of the US financial crisis thus far on the Asian economies", the central bankers' statement said.