ASEAN markets await crucial Fed decision

Money exchangeASEAN stocks and currencies were down on September 18 as countries eagerly awaited the decision of the US Federal Reserve to reduce its quantitative easing programme of buying $85 billion US government bonds monthly.

An expected tapering of the programme has already led investors to flee from Southeast Asian markets and put their money to work back in the US or in dollar assets, which has brought the capital markets and currencies in ASEAN under pressure.

With few catalysts to drive buying, the focus now is on the two-day Fed meeting that ends on September 19, and an announcement is expected closely thereafter. The key question is the pace of the reduction. Most observers expect the Fed to reduce monthly buying to $75 or $70 billion – a move that is now already priced in. If it is more, ASEAN nations could feel the heat.

However, most experts do not believe a repeat of the Asian financial crisis in 1997/98. ASEAN countries have come a long way since then when the region was hit by large-scale capital flight that sent many economies into a tailspin.

Foreign currency debt levels are now much lower, and official foreign reserves much higher. Flexible exchange rate regimes have ended overvalued currencies and sudden re-pricing of foreign currency debt. But volatility will continue and it has to be seen which Southeast Asian economies can sail through the headwinds.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

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ASEAN stocks and currencies were down on September 18 as countries eagerly awaited the decision of the US Federal Reserve to reduce its quantitative easing programme of buying $85 billion US government bonds monthly. An expected tapering of the programme has already led investors to flee from Southeast Asian markets and put their money to work back in the US or in dollar assets, which has brought the capital markets and currencies in ASEAN under pressure. With few catalysts to drive buying, the focus now is on the two-day Fed meeting that ends on September 19, and an announcement is...

Money exchangeASEAN stocks and currencies were down on September 18 as countries eagerly awaited the decision of the US Federal Reserve to reduce its quantitative easing programme of buying $85 billion US government bonds monthly.

An expected tapering of the programme has already led investors to flee from Southeast Asian markets and put their money to work back in the US or in dollar assets, which has brought the capital markets and currencies in ASEAN under pressure.

With few catalysts to drive buying, the focus now is on the two-day Fed meeting that ends on September 19, and an announcement is expected closely thereafter. The key question is the pace of the reduction. Most observers expect the Fed to reduce monthly buying to $75 or $70 billion – a move that is now already priced in. If it is more, ASEAN nations could feel the heat.

However, most experts do not believe a repeat of the Asian financial crisis in 1997/98. ASEAN countries have come a long way since then when the region was hit by large-scale capital flight that sent many economies into a tailspin.

Foreign currency debt levels are now much lower, and official foreign reserves much higher. Flexible exchange rate regimes have ended overvalued currencies and sudden re-pricing of foreign currency debt. But volatility will continue and it has to be seen which Southeast Asian economies can sail through the headwinds.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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