SINGAPORE: The Reserve Bank's quarter-point cut, which traders dismissed as a remote possibility just days ago, shows how vital monetary easing has become across the region. From Sydney to Singapore to Seoul, policymakers risk falling behind the curve and hurting investment and growth.
The Reserve Bank of Australia cut its 2.5 percent official cash rate by a quarter percentage point on Feb. 3. "The economy is likely to be operating with a degree of spare capacity for some time yet.
Futures market prices suggested a 22 percent probability of a rate cut as recently as Jan. 21. The probability of the rate being reduced rose to 63 percent on Feb. 2.
The Monetary Authority of Singapore, which uses the local currency's exchange rate to guide financial conditions in the city-state, unexpectedly eased monetary policy on Jan. 28, ahead of its scheduled review in April.
India reduced its benchmark repo, or repurchase, rate by a quarter percentage point to 7.75 percent in an unscheduled move on Jan. 15.
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