By Gabriel Chen
ASSET price inflation could become a key problem for emerging
economies buoyed by capital infusions from developed countries,
warned a top banker at a seminar in Singapore on Thursday.
Hong Kong-based Jaspal Bindra, chief executive for Standard
Chartered Bank's Asian operations, told the Singapore Indian
Chamber of Commerce and Industry that the perceived risk of asset
inflation was likely to grow as a consequence of inflows of foreign
direct investment.
And money pouring into developing countries could raise concerns
about their currency policies, particularly those that are pegged
to the US dollar.
Mr Bindra said the challenge for emerging economies was whether
they can absorb capital, such as foreign direct investments.
'The lack of depth and breadth of capital markets means such
flows find a home in equity or real estate, adding to asset price
inflation,' he said.