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Rate cut spreads in Asia, but currency risks loom

India, Thailand and New Zealand surprise analysts with bigger-than-expected moves

Reserve Bank of India led by Gov. Shaktikanta Das cut the policy rate to boost Indian economy.   © Reuters

MUMBAI/BANGKOK -- The central banks of India, Thailand and New Zealand all lowered key interest rates on Wednesday, following the U.S. Federal Reserve's decision to cut rates. The moves show the central banks' eagerness to tackle slowing growth and economic uncertainty, particularly the outlook for the U.S.-China trade war.

The Asian central banks wasted no time jumping on the opportunity created by the Fed's move, shielding them from currency depreciation. But the risks of a weaker currency and a subsequent capital outflow persist, and space to maneuver remains tight. 

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