(Bloomberg) -- The International Monetary Fund cautioned Asian central banks against prioritizing what they think the US Federal Reserve will do as they lay out their own policy paths.

“We recommend Asian central banks to focus on domestic inflation, and avoid making their policy decisions overly dependent on anticipated moves by the Federal Reserve,” Krishna Srinivasan, the fund’s Asia Pacific director, said in a prepared statement for a press conference on Thursday. “If central banks follow the Fed too closely, they could undermine price stability in their own countries.”

Earlier Thursday, IMF Managing Director Kristalina Georgieva noted in a Bloomberg TV interview that “all eyes are on the US,” with many officials in Washington for the IMF-World Bank spring meetings asking “how long will the Fed be stuck with higher interest rates.”

Indeed, “US monetary policy matters for Asia,” Srinivasan said. “IMF staff analysis shows that US interest rates have a strong and immediate impact on Asian financial conditions and exchange rates.”

At the same time, each Asian central bank should handle their own price dynamics on their own merits, he indicated.

“A tighter-for-longer stance” should be taken in economies where inflation is elevated while policy settings should be accommodative in economies with sizable slack, Srinivasan said.

The strong US economy with stubborn inflation has repeatedly diminished prospects of the Fed’s interest rate cuts, pushing the dollar higher against its counterparts in Asia. Japan and South Korea have publicly voiced serious concerns over the weakness of their currencies. 

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