Asian Development Bank President Masatsugu Asakawa spoke on Friday last week. he flagged capital controls and forex intervention as tools Asian authorities can use in the battle against the surging US dollar.
We've already seen the Bank of Japan use FX intervention last week, and the People's Bank of China may be next cab of the rank with capital controls if the yuan continues its slide.
Asakawa:
- "This time, the pace of monetary policy normalisation by the U.S. Federal Reserve is very fast, and already causing some turbulence in emerging capital markets,"
- "With the United States raising interest rates, emerging economies have little choice but to hike rates to avoid their currencies from depreciating too much,"
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of course, neither Japan nor China is currently in the rate hike camp, making the other tools mentioned above the policies of choice.
More from Asakawa here at the link ICYMI.
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Asakawa was formerly the Japanese vice finance minister for international affairs.
