Tuesday, July 13, 2010

>Asia: votes of confidence (DBS)

■ After a brief pause in June, Asia’s central banks are tightening again

■ In the past two weeks, Taiwan, India, Malaysia and Korea have all hiked interest rates

■ This is bread-and-butter economics. GDP in Asia is far above precrisis levels; inflation is nearly back to average. Interest rates must return to normal too, and they are

■ The rate hikes are a loud vote of confidence from Asia’s central banks that growth will continue, despite weakness in Europe (and more generally, the G3).

■ The world has not decoupled. The G3 matters, but Asia matters more.

To read the full report: VOTES OF CONFIDENCE

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