Asia Monitor

Comprehensive country-by-country macroeconomic analysis, risk appraisals, latest market data and forecasts for Asia

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Key stories from this month's issue...

Economic Analysis - Monetary Policy Stance To Remain Accommodative - JUNE 2016

Australasia & South Pacific May 2016 / Vanuatu / Economy

The Reserve Bank of Vanuatu (RBV)'s decision to raise its policy rate to 100bps above the central bank's 91-day Notes interest rates (standing at 1.9%) does not represent a change in its accommodative monetary policy stance. The rediscount rate is still low, when compared with the pre-Tropical Cyclone Pam level of 5.25% in March 2015, and we believe that the central bank will keep its monetary policy loose amid below target inflation, in an attempt to support the country's recovering economy.

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Economic Analysis - Outward Investment To Continue Over The Coming Quarters - JUNE 2016

China & North East Asia May 2016 / China / Economy

Chinese companies will continue to use overseas mergers and acquisitions as a means to diversify their portfolios, improve competitiveness and climb up the value chain. We expect Chinese companies to continue moving away from acquiring overseas companies in the energy and materials sectors, and to start targeting companies in the fields of technology and high value-added services. In addition, Chinese companies will favour firms from developed markets, as purchasing these companies will help them acquire technologies and business know-how, as well as gain access to foreign markets.

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Economic Analysis - Strengthening Of Trade Links Positive For Long-Term Growth - JUNE 2016

South Asia May 2016 / Nepal / Economy

While involvement in the US trade participation programme and the signing of a pact aimed at strengthening road links with India will be positive in helping Nepal develop its manufacturing sector, these gains are only likely to be realised over the longer-term. In the near-term, growth is likely to remain weak due to delayed reconstruction efforts.

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Industry Trend Analysis - Refineries To Maximise Production Over Next Two Years - JUNE 2016

South East Asia Vol 1 May 2016 / Thailand / Industry

Strong consumer demand for gasoline and construction demand for diesel, combined with low oil prices, will provide impetus for Thailand's refiners to maximise production over the next two years.

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Economic Analysis - More Easing On The Cards Amid Risk Of Fiscal Tightening - JUNE 2016

South East Asia Vol 2 May 2016 / Indonesia / Economy

BI will pause its monetary easing cycle before resuming in H216. The risk of fiscal tightening is rising as delays to the tax amnesty bill and low oil prices could weigh on the government's ability to finance its infrastructure projects. This will prompt the central bank to adopt a more accommodative monetary policy stance to spur private investor appetite and boost aggregate demand to prevent a premature end to Indonesia's fledgling growth recovery. A tame inflationary environment and a stable rupiah will aid BI in this regard.

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