The coming year is shaping up to be a challenging one for Asian central bankers, confronted with a balancing act of supporting economic growth whilst guarding against potential volatility arising from the normalization of U.S. interest rates.
But there is one source of respite as policymakers tread this delicate course: receding inflationary pressures.
“The benign inflation outlook is helpful as it gives Asian policy makers breathing room at a time when global outlook remains multidirectional, with the U.S. economy showing strength while EU and China look to be losing momentum,” said Taimur Baig, chief economist, Asia at Deutsche Bank.
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