ADB advises emerging East Asia to be on guard against movement of capital flows

WHILE emerging East Asia economies look relatively well-placed to manage any sudden reversal in capital flows, policymakers in this fast-growing region have to always maintain their vigilance on the effect of such risks, according to a newly published report by the Asian Development Bank (ADB).

In its quarterly Asia Bond Monitor released over the week, the Manila-based lender points out that “strong macroeconomic fundamentals” within emerging East Asia suggest that any sudden reversal in capital flows would likely stem from events happening outside the region such as volatility in global financial markets which could drive investors away to safe-haven assets such as what happened during the 2008/09 global financial crisis.