South-East Asian interest rates to fall further (Mar 07)

Across South-East Asia the prospect is for further interest rate cuts over the next few months, driven by slowing growth, fading inflation concerns, and local currency strength against a globally weak dollar. Elsewhere, we expect rates to be falling in Korea by the end of the year as well, as the economy slows and concerns about the booming housing market ease. The exception is India, where continued strong growth and rising inflationary pressures should ensure that interest rates continue to rise. Meanwhile, the recent turmoil in global financial markets has highlighted the downside risks to equity markets across the region.