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Inflows to Asia have moderated as concerns over the global economy have grown this year, the ADB said.
ReplyDeleteThere were two main concerns about a surge in short-term flows. First, cash flowing in can complicate efforts to cool economies, and can weaken the effectiveness of monetary policy. Second, inflows can be followed by a destabilising reversal of cash.
"Regional policy makers may therefore find it appropriate to use well-targeted measures to improve their financial supervision and regulatory rules, as the recent short-term flows are dominated by those coming through the banking channels," the ADB said.
(Reporting by John Mair; Editing by Richard Borsuk)