Loose rate policies suit Asia, for now - ADB chief

By Daniel Bases

NEW YORK (Reuters) - Asia's speedy economic recovery relative to the rest of the world is not yet strong enough to withstand tighter monetary policy, Asian Development Bank President Haruhiko Kuroda said on Monday.

"You see, at this stage the economic recovery, even if not fragile, (is) not so solid. So monetary policy will continue to be expansionary for some time," Kuroda told Reuters in an interview before a speech at Columbia University.

"That might encourage some asset markets to overreact, so to speak. But at this stage, it is not advisable for monetary authorities to tighten monetary policies," he said.

The ADB expects developing Asian economies on average to grow 3.9 percent this year and 6.4 percent next year.

The so-called Group of Three or G3 -- Japan, the United States and the euro zone -- are projected by the bank to contract 3.7 percent this year and grow 1.1 percent in 2010.

Kuroda said inflationary pressures remain low and in fact are not rising in many countries, allowing them to keep interest rates low.

But when they do start to take away the monetary and or fiscal stimulus, there is no compelling reason for Asia do so all at once.

"It all depends on country circumstances... No need for emerging economies to exit in a synchronized manner, or fiscal and monetary policy exits at the same time." Kuroda said.