The analysis of the liabilities side of the balance sheet exhibiting diversity across the Asian panorama is more interesting. Apart from currency and reserve money, liability items like issuance of central bank paper, the use of deposit facilities and changes in government deposits – all of them have an interesting story to tell.
The efficacy of various instruments for sterilisation of large capital inflows have also been covered comprehensively in the paper. The challenges for central banks also include managing these more complex operational issues while ensuring that the structure of the assets and liabilities are consistent with central banks’ overarching policy objectives.