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Asia’s QE money heads out on a slow-moving train
In the past four years, there were few investors entered Asia and were now exiting the Asian financial markets. This was after the US Federal Reserve announced stimulus reduction. The anticipated tightening of US monetary policy had been greatly exaggerated which created fear in the Asian markets.
Last April, currencies, equities and government bond had been sold off. This was after the federal reserved signaled that it would soon cut its bond buying program after about five years of super easy monetary settings.
Despite the struggles in emerging markets in Asia last June, data had suggested that very little money left the Asian financial markets. In the same month, Asia stock markets were sent to multi-year troughs and currencies to record lows including the India rupee.
Foreign exchange reserves data showed that Asia's top 10 economies including China and Philippines had gained inflows worth USD2.1 trillion between November 2008 and April 2013. This was at a time when the Federal Reserve had pumped massive amounts of cheap stimulus into financial markets.
From April around 4% of USD86 billion had left Asia, half of it coming from China.
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