Asian central banks forced to do their governments' job

[TOKYO/JAKARTA] Asia's central bankers are being forced to juggle their day jobs with what their governments have failed to do - steeling their economies for the hard times. Critics say that many governments have done too little to remove barriers to domestic and foreign business investment, cut red tape, upgrade infrastructure and develop deep, well-functioning financial markets when the region was flush with cheap money.

Now that economic rocks are emerging as the tide of the Fed's easy cash recedes, central banks are having to step in, detouring from their price and financial stability mandates, to shore up weak economies.

India and Indonesia were first in the firing line of investors last year when the Fed's plans to scale back its US$85 billion in monthly cash injections started to take shape. Both took emergency steps, intervened in markets and raised interest rates to shore up battered currencies. Since then, the Fed has started winding down its stimulus in earnest, putting emerging markets on the back foot o…