Mutiny against the greenback

Propelled by a strong post-pandemic recovery in the US, sticky inflation, and geopolitical tensions, a surging dollar has battered almost every Asian currency. The changing expectations that the US Federal Reserve (Fed) might delay its anticipated rate cuts in the wake of stronger March inflation numbers and lingering conflict in the Middle East are causing home currencies to tumble across Asia and capital to outflow. Last week, Bloomberg reported that all but one of the 23 developing nation currencies it tracks have dropped against the greenback this year. The Japanese yen plummeted over nine per cent falling to its weakest in 33 years, while the Korean won weakened by 6pc hitting its lowest level in eight years. India’s rupee and Vietnam’s dong are also at their weakest ever. Likewise, the Indonesian rupiah has been at its softest in four years, and the Malaysian ringgit has been close to its weakest ever since the 1998 Asian financial crisis.