SYDNEY (Reuters) - Asian governments and central bankers breathed a
collective sigh of relief on Thursday after currencies edged up and
stocks rallied rather than recoiled at the U.S. Federal Reserve's
decision to raise interest rates.
The prospect of the first hike
in U.S. rates in almost a decade had kept emerging markets on edge in
the weeks leading up to the Fed's decision, amid fears investors would
redirect capital to higher-yielding U.S. debt in a fresh blow to their
shaky economies.
However, an initial rally smoothed the brows of
Asian central bankers who were the first to respond to the hike as U.S.
policymakers sought to end an era of ultra-low rates that followed the
global financial crisis.
"It is a relief that even despite the
Fed rate hike, turbulence in global financial markets has not been
large," said South Korean Vice Finance Minister Joo Hyung-hwan.
The
more composed initial reaction was aided by the fact the Fed had
clearly flagged the move in advance, and also said the pace of
tightening would be gradual - an important signal for many asset markets
adjusting to less stimulus after years of flush Fed liquidity.
However,
Citibank's Asian economic team said while equities and credit market
had perked up, the response of commodity market suggested caution.
"We
have long argued that early signs of growth in emerging markets would
be seen in commodity markets, so we take heed that neither energy nor
metal prices shared the optimism of the equities and credit markets,"
the analysts said in a report.
Hong Kong's top central banker,
who was obliged to immediately match the Fed's hike under the
Chinese-run city's peg to the U.S. dollar, said he expected only a
modest outflow of capital as a result of the Fed's move.
China's
central bank also added to the reassuring mood, penciling in economic
growth of 6.8 percent for next year in a working paper released on
Wednesday, down only slightly from an expected 6.9 percent this year.
A senior researcher at an official Chinese think tank chimed in, saying the hike would not lead to major economic disruption.
Zeng
Gang, director of the Chinese Academy of Social Sciences banking
research division, told the official People's Daily paper that as the
rate rise had been widely expected, it had been priced into markets and
the announcement impact was limited.
Data showing drops in
exports from Japan and Singapore, including big falls in shipments to
China, sounded some of the few sour notes on Thursday, but Tokyo too
voiced relief that emerging markets were taking the U.S. rate hike in
their stride.
