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Asia central banks expected to slow rate hike after Fed decision

Increasingly dovish stance in US eases currency slide in the region

People walks near the fountain of Indonesia's central bank, Bank Indonesia, in Jakarta. The bank kept its interest rate unchanged at its monetary policy meeting on Thursday.   © Reuters

JAKARTA -- Asian central banks that have been forced into aggressive rate hikes this year have been given some breathing room in 2019, after the U.S. Federal Reserve struck a more dovish tone in its monetary policy for the year ahead.

The Fed's monetary policy has been the key cause of the plunge in emerging market currencies. Its new projection of two rate hikes next year, one less than it previously indicated, will come as a relief for Asian monetary authorities who spent the best part of 2018 trying to prop up their currencies.

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