Central bank peer pressure seen as factor in rush to cut Asian rates

Spare a thought for Amando Tetangco. The Philippine central bank chief, a shooting enthusiast who has likened battling inflation to firing a handgun, has the strongest currency in Asia this year.

It's not hard to see why. He's one of the few holdouts not to lower interest rates in a region where central banks have been rushing to cut amid slowing inflation and a weakening in exports to China. South Korea's central bank became the latest to surprise economists last Thursday when it reduced its benchmark to an all-time low, a day after Thailand moved.

"There is a bit of peer pressure for central banks to match what others are doing in the region," said Frederic Neumann, co-head of Asian economics research in Hong Kong at HSBC, whose team had one of the two forecasters to predict correctly the South Korea decision.

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