PM Lee: No replay of Asian financial crisis

PM Lee: No replay of Asian financial crisis

Prime Minister Lee Hsien Loong does not see a repeat of the Asian financial crisis that sent economies in the region into a deep dive, in spite of concerns over capital flight as the US ends its expansionary monetary policy.

Speaking at a dialogue with business leaders on Tuesday, PM Lee said Asian economies are much stronger than they were in the late 1990s, having put in place safeguards to deal with the impact of large capital flows.

"On balance I would take a sanguine view," he said in reply to a question from moderator Robin Hu, chief executive of the South China Morning Post Group.

While certain individual countries may have problems, "on balance I would say we are in a safe position". He added: "I don't see this being a new global crisis or regional crisis."

He cited the Chiang Mai Initiative as an example of the safeguards.

It is a regional currency swap arrangement which helps countries to strengthen their balance sheets and support their currencies in times of need.

He also believes that big developed economies like the United States, the cause of large capital flows into Asia as their central banks printed money and slashed interest rates, will remove these measures with care so as not to destabilise their own economies.

In the 30-minute dialogue at the celebration of IE Singapore's 30th anniversary, Mr Lee was also asked for his views on the outlook for China and ASEAN.

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