Two themes, a sort of call-and-response, dominated the IMF annual meetings in Bali in October.
One was the double act of the escalating US-China trade war and the gathering momentum of a global rates-rising cycle. The other was the fact that nobody in Asia – bankers, central bank governors, policymakers – seems particularly concerned about it.
It is 20 years since the Asian financial crisis, 10 since the global sequel, and the common view among most Asian nations is that having been flattened by the first, they sailed through the second.
The result is a sense of either preparedness or complacency, or both, about the latest macroeconomic ructions.
Here’s Thai central bank governor Veerathai Santiprabhob, responding to the observation that Thailand – the place where the Asian financial crisis began – has become a safe haven, receiving several years of inflows into the Thai baht: “You can say Thailand has been lucky, but we should be given some credit for the way we have handled our economy and limited the different sources of fragility in our systems.”
Stockpile
Thailand has run a large current-account surplus for five years, hitting about 7% of GDP, has had the best-performing currency in Asia for 18 months and has built a stockpile of foreign-currency reserves.
