Asia's central banks back in rate-cutting mode

Central banks in the Philippines, Korea and Vietnam have cut their policy rates over the past month in response to the deterioration in global demand. Q2 GDP data out so far in Asia have been soft, mainly due to weakness in exports. Given our view that the euro-zone is set to intensify and that global growth will remain weak, we expect further rate cuts across the region this year. Consumer price inflation is falling in most countries and should not be a barrier to policy easing.