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Southeast Asia Ramps Up Inflation Fight

CNBC.com
Friday, 6 May 2011 | 3:40 AM ET

This is a transcript of top stories presented by China's CCTV Business Channel as produced by CNBC Asia Pacific.

Good evening, I'm Christine Tan and you're watching "Asia Market Daily".

Southeast Asian nations are ramping up their fight against inflation.

Data out today shows annual CPI in The Philippines rose by a larger than expected 4.5 percent in April - the biggest rise in a year.

That's at the upper end of the central bank's forecast of between 3.7 and 4.7 percent.

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(SOT) Lim Su Sian, Economist, RBS:
Inflation expectations regionally are still on an uptrend. This isn't any different for Malaysia or The Philippines. Both central banks continue to sound very hawkish in their guidance. Neither of them have sort of what I would describe as rampant inflationary conditions. So this slowly, slowly approach will probably serve them well. What we need to recognize though is that we're not even talking about tightening here, what we're talking about is a normalization. Real policy rates are still negative and hence policy is still a little too accommodative in that sense.

Lim Su Sian of RBS says many central banks in the region still have to play catch up - as they've waited too long to act against inflation.

(SOT) Lim Su Sian, Economist, RBS:
We are going to continue to see I think, going forward central banks in Asia will continue to have to tighten. There will be central banks other thank India that will have to sort of come in with a massive dose of catch up. And when I say that I am referring to banks like, Bank Indonesia, but by and large, they are still very much on a path of normalization and this isn't going to be the end of it. There will be more rate hikes to come in the next couple of months.

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Thanks for watching the latest "Asia Market Daily". I'm Christine Tan from CNBC.

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