Already under strain, Asian central banks face a tough year ahead

London

CENTRAL banks in Asia are under significant strain. The November election of Donald Trump as US president and expectations that the Federal Reserve will raise interest rates have generated significant outflows from Asian markets. In the five weeks since Nov 8, the ringgit has fallen 5.3 per cent, the yen by 9.4 per cent, and the renminbi by 1.8 per cent against the dollar.

Geopolitical volatility is widespread. Several South-east Asian countries are enduring political turbulence. India is experiencing the fallout of a clumsily handled demonetisation initiative. Mr Trump's rise raises the risk of a US-China trade war.