Thu, Nov 01, 2012 - Page 15 News List

Asia welcomes QE3 cash flood to boost low growth

POSITIVE SPILLOVER:Unlike in 2010, when regional economies feared the effects of a currency surge, the influx comes at a time where it can energize weak markets


The Philippine Central Bank last week cut rates by 25 basis points.

In Malaysia, Alliance Investment Bank chief economist Manokaran Mottain said he did not expect a rise in the ringgit to lead to higher prices for “the man on the street.”

DBS said in a report that the underlying notion that the Fed funds rushed straight to Asia was wrong.

“Eighty percent or more of the money the Fed has ‘injected’ into the economy has stayed right there at the Fed in the form of excess reserves,” it said.

The money that flowed into Asia after QE2 “came from investors taking comfort in the Fed policies and putting ‘more risk on the table.’ Other things equal, one might expect that again now,” it said.

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