Asia safe from crisis: IMF

The International Monetary Fund has assured that Asian economies will not face any substantial financial crisis amid the heavy influx of global capital. Developing Asian economies are successfully attracting healthy foreign direct investment and IMF suggested that to keep healthy pace in the economy, each economy should introduce new measures to manage huge inflows of foreign funds and exploit them for accelerating their economic expansion. IMF Managing Director Rodrigo Rato said: Capital inflow is certainly a worldwide phenomenon. For Asian economies, that reflects a lot of things including increased liquidity and growing attractiveness of the economies. I believe that is good news A decade ago, major Asian economies were in a great crunch, BoP were not at its best, currency values were lynching down incessantly, but open market policy put economies back on the competitive international business dais. Foreign players are attracting toward the rich unexplored resources of Asian region and open market policy has opened the door for investors. With minor domestic players, foreign moneylenders are putting huge money in the market and successfully gaining strength. Service sector is the biggest gainer, but secondary sector is also accelerating from FDI. Minor economies, like Thailand, too are leaving their darker period behind and making considerable progress. China, India and Japan are leading the path, whereas South East Asian nations are backing them firmly. However, for the overall development, IMF has suggested Asian economies to become more rational for their currency policies. China impeached for unnecessary controlling its currency wherein western nations seeks more flexibility in its exchange rate. As Rato said: Greater exchange rate flexibility is not only in China’s best interest but would allow other Asian countries to appreciate with less concern about competitiveness Image Via: Reuters

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