Higher Rates Remain a Risk for Emerging East Asia Borrowers

Governments and central banks in emerging East Asia need to stay vigilant to guard against potential financial risk associated with higher interest rates, according to a report by ADB. Softening inflation in the past several months has allowed most central banks in the region to hold off on further interest rate hikes, and some have started lowering rates to boost economic growth. Still, elevated price pressures, a solid job market, and robust economic performance in the United States could lead to further interest rate increases by the US Federal Reserve.