MONETARY policy to manage inflation is a blunt instrument, the United Nations said.
Monetary policy could imply controlling external or supply-led price increases by restricting local demand, the UN's Economic and Social Commission for Asia and the Pacific said.
The advice from UNESCAP follows the recent release of its annual report called Economic and Social Survey of Asia and the Pacific 2012.
The United Nations has recommended that Asia Pacific governments deploy other inflation-fighting measures, like reducing taxes or tariffs, along with restricting inflows of foreign capital.
"Nevertheless, in cases of substantial price increase, monetary policy may remain the most effective tool albeit with significant growth implications.
"Policy makers thus need to find their preferred inflation growth combination, as there is clearly a trade-off between tackling the former and fostering the latter," the UNESCAP report said.
The report said the region had the policy space to launch fiscal stimulus packages and lower policy rates to mitigate worsening of the global economic environment.