Asian banks have recently been cutting interest rates more frequently to increase liquidity and boost consumer purchases.  South Korea which is in recession has seen the steepest  cut in interest rates in Asia. The Korean Central bank cut interest rates from five percent at the end of 2007 to two percent last month, the largest jump in a decade. India and China have similarly, drastically cut interest rates in the past few months. While India’s Reserve bank of India cut the repo rate by 2.75 percent since end 2007, China’s People’s Bank cut rates by 2.16 percent during the same period.

Central Asian Banks initially slashed interest rates in a quick bid to  contain the economic crisis in their countries. However the effect of lowered interest rates as one of the factors saving Asian economies is only now being felt as imports gradually rise, sales of houses and cars increase and job losses are stemmed.

Economists however predict that Asian economies are unlikely to cut interest rates further as their currencies have depreciated significantly and inflation has fallen to multi-year lows.