Rate shocks in Asia show why economists should be sceptics

The words of governors may not reflect underlying considerations

- DANIEL MOSS isa Bloomberg Opinion columnist covering Asian economies.

Surprises in economics get bad press, unless they are nice, and those have been scarce of late. A string of monetary policy upsets indicate something is seriously off in Southeast Asia. Projections that interest-rate cuts would be forthcoming in Thailand and Indonesia were wrong. A consensus that the Philippines was done with reductions was wide of the mark. How to account for these misses? At a bare minimum, the decisions indicate a more unsettled financial and political environment than previously assumed.

They are also a useful, if uncomfortable, reminder that turning points are tricky. And that guidance by central bankers themselves is rife with caveats. It seemed a sure thing that Bank Indonesia would avail itself of another opportunity to juice growth despite frequently stating that it wants a stable currency. The rupiah is the worst performer against the dollar in the region this year and trades near a record low. But that hasn't stopped Jakarta from delivering a series of shock rate cuts over recent months. The head of the bank declared in September that he was taking an “all-out pro-growth” stance. The remarks appeared to be a hearty endorsement of President Prabowo Subianto’s goal of accelerating the economy’s expansion.