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Staff Papers
 Published Date: 03 March 2025

Asian Capital Flows and the Global Financial Cycle

Chris Walker, Alex Phua, and Xiong Wei
View Document Asian Capital Flows and the Global Financial Cycle (462 KB)
ABSTRACT

Capital flows to emerging Asian economies have become less dependent on the global financial cycle in the years since the Global Financial Crisis, during which policymakers in the region took steps to reduce their vulnerability to capital flow surges. Variations in the global financial cycle explain significantly less of the variation in capital flows during the past 15 years than the preceding 15-year period. However, the impact of global factors on domestic interest rates and some other domestic variables has remained undiminished, indicating that the transmission of external shocks to Asian economies may now be occurring through alternative channels.

Suggested citation:
Walker, Chris, Alex Phua, and Wei Xiong. 2025. "Asian Capital Flows and the Global Financial Cycle.” MAS Staff Paper, no. 2025/2