Asian economies should adopt coordinated monetary policies and minimize the threat of spillover effects causing large external shocks, ROC Central Bank Gov. Perng Fai-nan said May 4.
Domestic policy actions may have unintended and undesired consequences that would at times undermine regional stability, Perng said. Such developments have also put a number of developing countries at risk, he added.
Sustainable regional development must be anchored by financial stability, Perng said, calling for the Asian Development Bank to direct its efforts to promoting financial inclusion and system reforms so as to bolster inclusive economic growth among developing member economies.
Perng made the remarks during an address on the final day of the 47th ADB Annual Meeting in Astana, Kazakhstan. The four-day event attracted more than 3,000 delegates, including academics, business leaders and top policymakers.
According to the central banker, talk of tapering, or winding down asset purchase programs, weighed down international financial markets. The effect took its toll on many emerging economies as their currencies were heavily devaluated and capital took flight, he said.
The policy conundrum for emerging markets is made even more complex when various central banks in major countries move in different directions, Perng said. These may partially offset each other and simply create more uncertainties, undermining economic and financial stability in emerging markets, he added.
Perng commended ADB for making tremendous progress in carrying out its development goals over the years, and continuous efforts to embark on a wide range of initiatives.
Perng also said it is important that the selection criteria for any economy’s inclusion in regional cooperative frameworks be based on economic and financial considerations rather than political factors. (SFC-JSM)
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