Central Banks: The Need to Hold on to Stimulus Policies

NHA TRANG, Vietnam, April 7 — Southeast Asian central bankers see scope for keeping economic stimulus policies in place as long as the recovery remains fragile, Philippine deputy central bank governor Diwa Guinigundo said today.
When the time comes to unwind those measures, however, they will not be able to synchronise steps and will have to act individually, he told Reuters after a meeting of central bankers from countries of the Association of Southeast Asian Nations.
“The governors have noted that the significant factor here is the strength of the recovery, both globally and in our respective jurisdictions, so if the recovery continues to be fragile then there is some scope for keeping the monetary and fiscal stimulus in place, of course with due recognition that doing that could pose challenges to inflation management,” he said.
“I don’t think we will be able to synchronise our moves,” he said, adding that pledges to enhance the exchange of information with regard to policy would be useful.
Asean groups an array of economies, including Brunei, Cambodia, Laos, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. So far, only Vietnam and Malaysia have raised interest rates, although others have taken steps to signal a wind-down of stimulus policies enacted during the global slowdown. — Reuters