Inflationary pressures stemming from currency depreciation may become a reason for Asian central banks, including the Bangko Sentral ng Pilipinas, to tighten monetary policy once again, the International Monetary Fund said.
In a virtual briefing, IMF Asia and Pacific Department director Krishna Srinivasan said central banks in the region should not be overly dependent on what the US Federal Reserve does and instead focus on domestic inflation.MANILA, Philippines — Inflationary pressures stemming from currency depreciation may become a reason for Asian central banks, including the Bangko Sentral ng Pilipinas , to tighten monetary policy once again, the International Monetary Fund said.
The suggestion from the Washington-based multilateral lender comes as the peso continued to stay above the 57 to $1 level since April 16. The local unit closed at 57.76 to $1 yesterday, down by nine centavos from its previous close. “Asian countries are better placed to cope with exchange rate movements today owing to fewer financial frictions and better macro fundamentals and institutional frameworks, and should continue to allow exchange rates to act as a buffer against shocks,” he said.
This year’s growth is higher than the 4.5 percent growth forecast for the entire Association of Southeast Asian Nations , a downgrade from the previous projection of 4.7 percent.
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