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Asia Welcomes Fed Move as Policy Makers Warn of Outflow Risks

  • Fed rate rise is "good news" for New Zealand, says English
  • Emerging market currencies may keep falling, says Tetangco
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Fed Rate Hike: A Hit or Miss for Asian Currencies?

Asian policy makers welcomed the Federal Reserve’s decision to raise interest rates for the first time in almost a decade, seeing it as an endorsement of better U.S. economic growth, while some emerging markets sounded caution about possible capital outflows.

On balance, the rate increase should be constructive for emerging market economies, Bangko Sentral ng Pilipinas Governor Amando Tetangco told reporters Thursday ahead of a rate decision at home. The region’s currencies may continue to fall against the U.S. dollar and money may flow out of developing countries, although not in the "significant magnitudes" seen in the past, he said.