Lorenzo Bini Smaghi on Friday warned that emerging Asia's refusal to raise rates first risked stoking instability and beggar-thy-neighbour policies elsewhere.

Speaking in Paris at a Euro50 group meeting, Bini Smaghi said the region's reluctance to exit was negatively impacting other countries. "The interventions in foreign-exchange markets to prevent emerging Asian currencies are shifting capital flows towards other regions such as latin America and pushing up the exchange rates of currencies