Where has all the money gone? Of course, part of the explanation is the success of Asia’s central banks in removing vast amounts of foreign exchange flows through sterilization. Even so, a net $700 billion has still leaked into domestic economies. And sterilization tends to push interest rates up as domestic liquidity is sucked out of the system. Again, this has not happened in Asia, where real interest rates are at historical lows.
Now Jonathan Anderson, chief economist, Asia, at UBS, has come up with an interesting explanation of this riddle: no one wants the money.
Access intelligence that drives action
To unlock this research, enter your email to log in or enquire about access
