ABSTRACT
It has been argued that one of the biggest inconsistencies in the global economy today is the fact that emerging Asian economies have rebounded faster than any other region, with a widening gap between their average growth rate and that of developed economies, yet most of their currencies have fallen since 2008 in real trade-weighted terms (The Economist, 2009). Moreover, there are ongoing concerns about the global consequences of exceptionally loose monetary policy in the United States and other developed markets as capital flows to emerging markets around the globe, especially in Asia, have been picking up and fears of appreciating local currencies remain a key policy concern.
