More Asia interest-rate cuts on the way, says Morgan Stanley1 min read . Updated: 24 Jul 2019, 02:42 PM IST
- India and Malaysia will likely continue easing to support weakening economies
- Central banks in India, South Korea, Australia, New Zealand, Indonesia, Philippines and Malaysia have already eased this year
Singapore: Asian central banks will continue to cut interest rates into next year, though limited policy space and elevated debt levels will make this a modest easing cycle for some, according to Morgan Stanley.
Taking dovish cues from the US Federal Reserve, Indonesia and the Philippines will unwind some of the aggressive tightening from 2018, while India and Malaysia will likely continue easing to support weakening economies, said Deyi Tan, Hong Kong-based Asia economist at Morgan Stanley.
Covid vaccination in India: 3.8 lakh people inoculated, 580 adverse events seen so far, says govt – Key updates1 min read . 08:14 PM IST
In Thailand and South Korea, one rate cut each is forecast from now through 2020, while China and Taiwan are unlikely to adjust policy rates, she said.
“This doesn’t look like an aggressive easing cycle," she said.
The Fed is poised to cut rates on 31 July for the first time since 2008, amid a global slowdown, yet still solid US growth. Across Asia, central banks in India, South Korea, Australia, New Zealand, Indonesia, the Philippines, and Malaysia have already eased this year.
Policy makers will also have room to use macro-prudential measures to take more targeted action than the blunt rate reductions allow. Those lending-control measures are likely to be ramped up in Asia, and can help ensure that liquidity will go to the right places in the economy, said Tan.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.