Asia - Falling inflation points to further rate cuts (Feb 07)

With growth easing in many Asian countries, inflation falling and currencies appreciating against the dollar we expect further interest rate cuts over the next few months. This process will be led by Thailand and Indonesia, but there is also a good chance of monetary loosening in the Philippines. The Korean central bank is still worried about the pick-up in house price inflation, and rates there are likely to on hold for a while before being cut later in the year. Only in India, where inflationary pressures are growing, is policy likely to be tightened further.