Asia Faces Rate-Cut Pressure to Curb Fallout From Virus
Asia — set to see the worst spillovers from the virus due to its dependence on Chinese demand and tourists — boasts a handful of central banks that have space to ease monetary policy in a world of rock-bottom interest rates.
Next up is Thailand, where there are growing calls for a move Wednesday, but no consensus estimate so far that a cut is coming. By contrast, a reduction is expected Thursday in the Philippines, which has reported the first death from the coronavirus outside China.
India — which on the weekend announced a budget that underwhelmed those hoping for more stimulus — also sets policy Thursday. A recent spike in inflation is expected to keep the central bank sidelined, but some economists think it will have to act at coming meetings to spur a faltering economy.
UBS Group AG’s China economist, Tao Wang, predicts a slump to 3.8%.
Growth was already taking a hit from drought and government spending delays, with the central bank last week signaling it may cut its 2.8% forecast for economic growth this year.
Bank Indonesia, which cut interest rates four times last year, stepped up intervention in the bond and currency markets Monday to stem losses in the rupiah. Deputy Governor Dody Budi Waluyo said the bank is open to further policy action as it assesses the impact of the virus outbreak, and “future utilization of easing space will be carried out at the right timing.
The Feb. 18 budget will likely provide support measures for industries like tourism and transport, and economists — including from JP Morgan Chase Co.
and Citigroup Inc. — see a higher risk that the Monetary Authority of Singapore will ease policy in April.
To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.
net, ;Malcolm Scott at email@example.com, Michael S.
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