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Asia Weekly

Asia/Pacific Central Banks Chart the 2011 Course

EXECUTIVE SUMMARY

Asia/Pacific central banks in 2011 will tighten policy rates gradually and resort to regulatory measures as slowing G3 growth, strong capital inflows and rising demand-side inflation and asset prices keep policy makers walking a tight rope. China will continue increasing lending rates and bank reserve requirements to contain credit growth, while Australia, India and South Korea will utilize interest rate hikes concentrated in Q2 and Q3. Indonesia will begin hiking rates in Q2 as real rates turn negative, whereas Malaysia will stay on hold until May amid contained[...]

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