Despite its growing exposures and linkages with world economy, Asia’s strong export base and oil revenues have helped the region to build external current account surpluses; consequently Asia’s foreign exchange reserves, which rose to $ trillion (and constitute 62% of the world reserves) now act as a strong buffer.
Smaller economies of Asia, however, have limited ability to withstand shocks and their macroeconomic stability has been disrupted and their reserves’ level has declined in the face of exogenous shocks. •  Unlike past episodes of crisis, the global economy today faces multidimensional challenges. Interdependence among economies introduces its own complications.