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Large capital inflows into Asia over the past few years are raising concerns among policy makers of a possible asset bubble building in the coming years.

Finance Minister Agus Martowardojo, speaking at the World Economic Forum session on “Financial Faultlines: Averting Aftershocks in Asia” in Jakarta on Sunday, said there were growing concerns that asset bubbles could be building in the region and that policy makers need to have better coordination to ensure that economic growth was not derailed.

Indonesia, however, will not impose capital controls to stem the flow, he said.

Within Indonesia, Agus said, property prices in certain areas have risen sharply and both the government and Bank Indonesia are keeping a close eye on the developing situation.

“I think one or two countries in the region are seeing a sharp rise in property prices and in Indonesia we are monitoring property prices in Jakarta and the five big cities,” he said.

Agus noted that the country’s strong macro-economic and fiscal position was reassuring, especially as its debt-to-gross domestic product ratio was low and the government had kept its fiscal budget deficit at less than 2 percent for the past five years.

Bank Indonesia deputy governor Muliaman Hadad, speaking on the same panel, reiterated that while there was no immediate threat of an asset bubble building in the country, “this issue is our concern, and it is possible that it could happen.”

The key, he added, is how the central bank and the government responded to the issue with counter-cyclical measures. These measures include maintaining prudent and pragmatic fiscal and monetary policies that can mitigate large fund flows in and out of the country.

The government, for instance, has set up a bond coordination framework in partnership with 14 state-owned enterprises to stabilize bond yields in the event of a large selldown of government bonds, the deputy governor said.

Trihatma Haliman, the chairman of one of the country’s largest property groups, Agung Podomoro, agreed that property prices in Jakarta have risen sharply but noted that he did not yet see a bubble building.

“We do not yet see a serious problem because we have started building high-rise apartments,” he said. “When prices go up, we sell more.”

The managing director of the Asian Development Bank, Rajat Nag, said that capital inflows were now less of a concern than compared to the 2008 global crisis as Bank Indonesia has taken appropriate measures.

He cited the required six-month holding period for Bank Indonesia certificates (SBI) as a good example of how the central bank has adopted prudent monetary policies.

Apart from rising property prices, bankers and fund managers at the Forum told the Jakarta Globe on Sunday that commodity prices were also looking frothy. This holds especially true in the coal mining industry where prices have risen sharply and supply has also expanded.

If the US starts on another round of quantitative easing, the impact on Asia could be significant as it may drive asset prices even higher.

“This could set the stage for the next global crisis if hot money continues to come out of the US,” said one Singapore-based fund manager who declined to be identified.

Additional reporting by Yanto Soegiarto and Dion Bisara