The Yin and the Yang

HSBC economists predict that declining global interest rates will create some friction for sliding ASEAN currencies, but downside risks still abound.

Weakness in the US dollar is set to ease debt-servicing costs and reduce incentives to hold dollar interest bearing assets, and thereby relieve the downward pressure on ASEAN currencies, say HSBC economists in their latest report on Asian currencies. However, declining export growth rates, external debt, political uncertainty and financial and corporate restructuring in most ASEAN nations means that domestic economies are likely to remain weak, hence mitigating the positive effect of the weakening dollar.

Also, an expected slowdown...

To continue reading, please login or register for free

Click for more on: yin | yang

Print Edition

FinanceAsia Print Edition