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Asia's Central Banks Struggle Over How To Deal With Capital Inflows Feb 11
Standard & Poors, Feb 2011
Abstract
Investment flows are converging on developing Asia again. Investors have become less averse to risk, and the region's economic prospects are brightening. Accommodative monetary conditions and rising fiscal concerns in the developed economies have also strengthened capital flows into the region. In addition, trades that aim to profit from the interest rate differentials--by borrowing in a currency where interest rates are lower and investing elsewhere in higher-yielding assets--between developed economies and developing Asia likely picked up again in the past year or so. Before 2008, these 'carry trades' had relied on the Japanese yen as the main funding currency. The U.S. dollar and pound sterling are now equally cheap alternatives and provide diversity of funding currency. Asia's central banks now...
Companies mentioned in this report are: Hong Kong (Special Administrative Region),Malaysia,Kingdom of Thailand,Republic of Korea,Republic of Singapore (Unsolicited Ratings),Taiwan (Unsolicited Ratings),People's Republic of China,Republic of Philippines,Socialist Republic of Vietnam
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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