<\/p>\n
Surging oil prices and the AI boom are widening a currency-market divide, deepening losses across most emerging Asian currencies while providing a buffer for others, such as the Korean won.<\/p>\n
The Philippine peso, Asia\u2019s worst-performing currency this year, hit a new low against the dollar Tuesday as high crude prices hurt the net energy importer. Indonesia\u2019s rupiah is hovering near its record low and Thailand\u2019s baht is near an 18-month trough. The won, by contrast, is trading around a two-year high, making it the regional outperformer.<\/p>\n
The Malaysian ringgit has fared better, helped by the nation\u2019s AI exposure and net energy exports. The moves are setting the stage for greater regional divergence, investors say, underscoring the edge enjoyed by nations that have spent years building up their tech capabilities.<\/p>\n
\u201cEconomies benefiting from the technology export boom should see their currencies remain relatively resilient,\u201d said Rajeev De Mello, global macro portfolio manager at Gama Asset Management SA. \u201cThose without this offset will be increasingly vulnerable to higher energy import bills and tighter global financial conditions.\u201d<\/p>\n
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Surging energy prices increase import costs for energy-dependent economies, worsening their trade balances. Brent prices rose to $117 per barrel on Friday, the highest level since April. They remain elevated at about $114 on Tuesday.<\/p>\n
Central banks in the region have stepped in to defend their currencies. Bank Indonesia has directly intervened in the spot and forward markets and increased hedging incentives to attract foreign portfolio flows. Bangko Sentral ng Pilipinas surprised markets with a 50-basis-point rate hike last week, seeking to contain inflation and bolster the peso by widening its rate gap over the Federal Reserve.<\/p>\n
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\u201cFX intervention may be stepped up if depreciation pressures intensify, while further rate hikes cannot be ruled out if inflation risks become more persistent,\u201d said Christopher Wong, a strategist at Oversea-Chinese Banking Corp. \u201cUltimately, central banks can help temper excessive FX volatility, but their ability to reverse depreciation pressures remains limited.\u201d<\/p>\n
The pressure from higher energy prices extends beyond Asia. The Egyptian pound fell to a record low in offshore trading this week as Middle East tensions escalated. Uganda\u2019s central bank tapped its reserves to defend the shilling as it sank to a fresh low on Monday, defying a directive from President Yoweri Museveni not to use the country\u2019s buffers for that purpose.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Oil #shock #boom #deepen #divide #emerging #Asian #currencies<\/p>\n","protected":false},"excerpt":{"rendered":"
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