Asia-Pacific economies had become the mainstream of monetary tightening

Bank of Korea on November 16 announced that it will raise the benchmark interest rate by 25 basis points to 2.50% to control inflation upward. This is the line the first time since July this year raised its benchmark interest rate. In addition, the act limits the total amount of support for small and medium enterprises lending rate remains 1.25% level.

On the same day, the Australian central bank announced the latest monetary policy meeting minutes also show that the bank raise interest rates to fight inflation, the threat of potential upside. Reserve Bank of Australia 2 accidents in interest rates by 25 basis points to 4.75%, whereas before, the bank has kept interest rates for 5 consecutive months, 4.50%, unchanged. In addition, India's central bank also announced earlier this month raised the benchmark interest rate to control the price level.

Analysts said part of the Asia-Pacific economies in the developed economies, the context of ultra-loose monetary policy has gradually reached a consensus, choose to tighten monetary policy strictly controls the inflation and force blocking hot money inflows.

South Korea to raise interest rates control inflation

South Korean central bank said the sharp rise in the prices of agricultural products, increase the price level in the country was strong. Although, with the return of stability in the future prices of vegetables will slow down the rate of inflation, but the recent upward pressure on inflation will continue. Data, South Korea October inflation rate jumped to 4.1%, the highest in the past 20 months, and higher than the upper limit of the bank inflation target range of 4%.

Bank of Korea said in the financial markets, with the continued inflow of hot money, the won currency and stock markets are soaring. And by high inflation, South Korea, long-term market interest rates have rebounded. Therefore, the future, the bank Monetary Policy Committee unanimously decided to tighten monetary policy to stabilize prices while maintaining steady economic growth.

In this regard, analysis, said Yonhap, the Group of Twenty (G20) leaders agreed that emerging economies can take prudent measures to control excessive macro inflow of foreign capital, therefore, focus on price stability the Bank of Korea to provide more flexible sex. South Korean Economic Research Institute is also believed that the Korean center of attention of monetary policy shifted from economic and monetary inflation.

By the financial crisis, the Bank of Korea from August 2008 onwards will be the benchmark interest rate gradually decreased from 5.25% to 2% low. This year in July, the bank started the process of normalization of monetary policy, the benchmark interest rate to 2.25%, but then, the bank will freeze interest rates for three consecutive months at this level.

Had become the consensus to tighten monetary

Australia's central bank announced the latest monetary policy meeting minutes also show that the risk of the bank balance has tended to moderately tight monetary policy side. Australia's inflation continued to trend upward in the next medium-term to maintain, if monetary policy look ahead, now interest rates are "prudent" decision.

On the same day the Bank of Korea Governor Jin Zhongxiu said the bank's benchmark interest rate is at a "neutral" level, the economy will recover "normalized rate" ready. Jin Zhongxiu also expects South Korea's inflation rate this year and next will be up to 3% and 3.4%, while economic growth will reach 6% and 4.5%.

Royal Bank of Canada senior strategist in emerging economies, Brian Jackson said the Asia-Pacific economies will be decisive decision-making authority has been concerned about the focus from economic growth and increasing foreign demand shift upward pressure on inflation.

Australia and South Korea's recent indecision different, the RBI has been raising interest rates six times this year, the cumulative increase repo rate and reverse repo rate by 1.5% and 2%, which is money the implementation of the normalization of the road, one of the strongest . Suba Rao, India's central bank governor, recently emphasized in the next 3 months to keep the benchmark interest rate unchanged against capital inflows uplift pressure on prices. But the bank will pay close attention to the price level.

Asia-Pacific economies, prevent hot money

In addition to raising interest rates to curb inflation, the Asia-Pacific economies also have to consider strengthening of capital controls to deal with the excessive inflow of hot money, the impact of the real economy.

South Korean Minister of Finance, Planning 15, Yoon Jeung-hyun said in Parliament, the Government is considering developing a number of measures to limit excessive short-term capital inflows, including: government bonds for foreign investors to buy South Korea to re-impose a withholding tax charge related to tax on banks further tightening of bank charges and foreign exchange derivatives exposure.

16, Jin Zhongxiu echoed that when the bank decided to rate these factors will be considered, because the end of last week's G20 summit in Seoul, the leaders have agreed to reduce the rate of conflict, while giving more space for emerging economies to take control measures to cope with the impact of capital inflows.

SC First Bank Korea that South Korea will not be introduced despite strong capital controls to discourage investors, but moderate measures introduced quite possible. This also means, G20 summit in Seoul, the outcome has been the "default" as the two intertwined lines, one of the United States condoned the dollar, and the second is the acquiescence of the emerging economies to withstand the hot money inflows. Earlier, Thailand has announced the purchase of their bonds by foreign investors held 15% tax levy. Analysts say the future there will be more Asia-Pacific and other emerging economies to join the ranks.