Asian central banks to reduce borrowing costs

Asian governments can be seen to be actively promoting and sustaining growth over reducing inflation.

Thus far South Korea, Thailand and Indonesia have released figures that reveal a slowdown in inflation and it is predicted that the Philippines and Taiwan will similarly report that they have kept on top of inflationary pressures.

Rate cuts have been introduced most notably in Australia, South Korea, China and Japan this week and analysts predict that the Bank of Korea and Indonesia will also announce further reviews to their monetary policy.

South Korea’s economy has needed greater intervention having announced a bailout plan of 14 trillion won.

Throughout last month, Asian stocks and currencies fell across the board due to the increased fear of recession causing investors to seek safer ground by moving away from those economies that are heavily dependent on exports, due to the reduction in global demand.

The swap rate is now at its lowest since the end of 2006, having fallen by 4.66 percent earlier this week.

There is seemingly action across Asian central banks to cut rates in order to safeguard their export dependent economies, although it was only six months ago that interest rates had shot up as inflationary pressures were at their highest due to the rising costs in food and energy bills.

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