Source: Bloomberg
After the Indonesian raising interest rate hikes to defend the Indonesian shield, Asia seemed to have a sign of upgrading to block the strong dollar, investors have focused on the next "Domino" that might be able to do the policy.
Japan, South Korea, Thailand, Taiwan, Malaysia, the Philippines, and India all fluctuate near many years, which has exacerbated the possibility of the official currency officials to prevent the local currency.Taking the exchange market of Han won and ringgig as an example, the market -reacting monetary policy expectations are no longer so partial.
Indonesia accidentally tightened the monetary policy this week, highlighting the difficult situation of the Asian Central Bank in response to the prospects of the United States' "higher and longer" interest rate prospects.Faced with the local currency that suppress economic growth and defending the decline along the way, Asian decision makers must make a choice.
"Indonesia's central bank unexpectedly raising interest rates will definitely make the central bank governor of other emerging markets restless," said HSBC chief Asian economist Frederic Neumann."Although the inflation in most parts of Asia has been normalized, the further strengthening haze of the US dollar has kept the central bank officials in the region."
China has been trying to cope with the real estate crisis, weak economic growth, and fatigue of RMB for several months, while the Philippines and other countries show the prospects of interest rate cuts at the beginning of the year.However, the adhesion of inflation data in the United States has promoted the beta on the Fed at the time of interest rate cuts at the Fed, and the entire situation has changed.
The Fed may not be so pigeon next, which means that US debt yields may still be high compared to Asia, which may cause global funds to flow out of the Asian market, and then reduce the local market currency.For example, India will have the first monthly capital outflows that have emerged for more than a year, and a fixed income of Thailand and Indonesia will be withdrawn.
Japan and Taiwan have raised interest rates in March, but the currencies of these two places have fallen down since that.The Japanese yen fell below the $ 1 against the 155 mark for the first time in more than 30 years, and the risk of official intervention in Japan intensified.
The Bank of Thailand said on Wednesday that the decision to maintain the benchmark interest rate at the ten -year high earlier this month enables it to have "policy available" and can cope with unimpeded challenges worldwide and domestic.
In the Philippines, officials may not achieve 2%to 4%of inflation targets for the third consecutive year in 2024.The country's financial minister said in an interview with Bloomberg last week that if the peso weakened further, it may have to postpone interest rate cuts.
The Bank of India also expressed a similar eagle tone in the policy evaluation in April. In view of the growth rate higher than 8%, economists delayed interest rate cut expectations.
Decision makers have resorted to other methods to curb the decline in the local currency. For example, South Korea conducted verbal warnings, Malaysia and Indonesian officials called on enterprises to exchange overseas profits. India, Indonesia, Thailand and Vietnam have intervened to defend the local currency.
"Not all central banks will use policy interest rates to support the local currency," said Fiona Lim, a high -level foreign exchange strategist in Malaysia."This depends on whether the economy can withstand the impact of rising interest rates, and there will be other ways to support the local currency."
