Policy makers in Asia shrug off rate-rise delay

Tokyo - Some considered that a delay in the first Fed rate increase could be helpful.

By Bloomberg

Published: Sat 19 Sep 2015, 12:00 AM

Last updated: Sat 19 Sep 2015, 10:40 AM

India's central bank governor said he was focused on his own monetary policy, not the Federal Reserve's. Japan said the Fed made the right move in holding off on raising interest rates. The Bank of Thailand noted little impact on financial markets.
All in all, Asian officials had limited reaction to what was one of the most keenly observed Fed decisions in recent years. The MSCI Asia-Pacific Index of stocks reflected the mood, ticking up 0.3 per cent by 5:20pm Tokyo time.
Some considered that a delay in the first Fed rate increase could be helpful. Thai Finance Minister Apisak Tantivorawong said it makes it easier for his country's central bank to maintain an accommodative monetary policy stance. Higher Fed rates could raise the risk of capital flows out of emerging economies.
Japanese Finance Minister Taro Aso said that emerging- market members of the Group of 20 had expressed concern at their most recent gathering about any move by the Fed to boost borrowing costs. That may have influenced the US decision, he told reporters in Tokyo. Japan's economy minister and chief cabinet secretary separately said the Fed acted appropriately.
The central bank governor of Indonesia, Southeast Asia's largest economy, opined that his US counterpart Janet Yellen was unlikely to oversee a rate rise this year. The Federal Open Market Committee's statement was quite dovish, and the Fed panel may not even raise its benchmark next year, Governor Agus Martowardojo told reporters in Jakarta.
South Korean officials used their typical language when addressing overseas developments - the central bank said it would closely monitor Fed policy.
Governor Amando Tetangco said the Bangko Sentral ng Pilipinas would also be keeping an eye on how markets digested the Fed call. The Philippines would also monitor the impact of portfolio flows on domestic liquidity and evaluate new inflation forecasts "to see if there is need to fine tune policy levers or communication", he said in a mobile-phone message.

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