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Jakarta: Southeast Asian central banks expect strong domestic demand and regional trade to help mitigate the impact of likely lower global growth, the banks said yon Saturdayfollowing a two-day meeting.
Governors from Southeast Asian countries, as well as South Korea and Taiwan, gathered in Jakarta for a regular meeting as policy makers globally try to tackle a credit crisis that is threatening to drag on worldwide economic growth.
"Governors noted that global growth is expected to weaken... while the region will be affected by increasing downside risk to the global outlook," the banks said in a statement.
Asian economies rely heavily on exports to the United States, so governments and bankers fear a weaker dollar and economy is likely to crimp Asia's growth.
But the statement said that "the impact will be partially mitigated by strong domestic demand and increased intra-regional trade".
Philippine central bank governor Amando Tetangco estimated on the sidelines of the meeting on Friday that about half of overseas trade among 15 East Asian countries was intra-regional trade.
The governors also stressed in the statement the need to strengthen surveillance, market sup-ervision and regional cooperation to better respond to financial market shocks, without elaborating. The meeting came amid volatile global markets and the weakening of the dollar.
Hard knock
The credit crisis emanating from the US housing market has engulfed US banks and hit the world's biggest economy hard, reflected in data that some economists believe suggests the United States is already in recession.
The dollar slumped last week to a record low against the euro and a basket of major currencies. It stands at a 13-year low against the yen.
Most Southeast Asian currencies - the Thai baht, Malaysian ringgit, Indonesian rupiah and Singapore dollar - have risen against the dollar. The baht, for example, is up 7.9 per cent since the start of the year.
But the Philippine peso has eased 0.3 per cent and the South Korean won has dropped 7.3 per cent.
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