Asian central banks under less pressure on tightening policy next year

THE pressure to normalise monetary policy is expected to ease up next year for Asian central banks, as the US Federal Reserve takes its foot off the pedal on its interest-rate hike cycle and weaker oil price outlook blunts inflationary pressures.

In addition, after an impressive rally in 2018, the US dollar is expected to run out of juice next year owing to a more dovish Fed and rising market pessimism over the world's largest economy. That means Asian policy makers may have less to worry about in terms of having to raise rates to prevent capital outflows and financial turmoil.

More recently too, the European Central Bank came across as dovish as governor Mario Draghi painted a gloomy picture of the economy, after the central bank left rates unchanged in December and announced the official end of QE (quantitative easing).