Channel NewsAsia: SINGAPORE – The current volatility in the financial markets underscores the need for the US Federal Reserve’s winding down of stimulus to be gradual and managed carefully.

Speaking at the Network ASEAN forum on Friday morning, Singapore’s Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said there was never a realistic prospect of a smooth and easy exit from quantitative easing (QE).

But the QE tapering will not be bad for the ASEAN economies as it is not in anyone’s interest for very low global interest rates to continue indefinitely.

It also signals an economic recovery in the US — a major market for ASEAN.

In the meantime, ASEAN’s priority should be to improve the climate for long-term investments, raise productivity and tap opportunities in China’s evolving economy.

Mr Tharman noted that ASEAN’s fundamentals are healthy, and the risk of balance of payment crises in the region is relatively low.

The region has also learnt its lessons following the Asian financial crisis in 1997.

Mr Tharman said: “Financial regulatory and supervisory regimes are also now more robust, and banks capital buffers are adequate. The non-financial private sector, too, in ASEAN countries generally have healthy balance sheets.”