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The Indonesia Stock Exchange in Jakarta: Emerging Asian markets suffered a net outflow of funds in February. (Photo by Takaki Kashiwabara)
Asia Insight

Asian central banks face white-knuckle steering as Fed tightens

Fund outflows and Chinese debt pose major monetary policy challenges

RYUSHIRO KODAIRA, Nikkei senior staff writer | China

TOKYO -- Asia's central bankers are about to have their mettle tested, and they know it.

"Stay calm on the weakening of the Hong Kong dollar," Norman Chan, chief executive of the Hong Kong Monetary Authority, said in a message posted on the central bank's website last Thursday. The currency had slipped close to the lower limit of its trading band of HK$7.7500-HK$7.8500 to the U.S. dollar. It had been declining since November, alongside a rise in American interest rates and a widening gap between Hong Kong and U.S. yields.

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