NYT: the war between the US and Israel in Iran has led to a rise in the American dollar and a weakening of Asian currencies.
Asian countries, which have already suffered from disruptions in energy supplies from the Persian Gulf region, are facing another problem — their currencies have started to rapidly depreciate against the rising dollar. This was reported by The New York Times (NYT).
As is often the case during times of global upheaval, investors rush to withdraw money from riskier regions and invest more heavily in American assets. This leads to a rise in the dollar, which is approaching its highest value against Asian currencies in the last two decades. This factor, combined with sharply rising energy prices, has weakened the economies of Asian countries. For example, at the beginning of the week, India's main stock index lost 2.5 percent. Since the start of the war in the Middle East, it has fallen by almost 13 percent. These losses have led to an outflow of money from India, which has collapsed the rupee. In turn, the South Korean won has reached a historic low against the dollar for the first time since the global financial crisis of 2008.
At the beginning of the year, the Thai baht had stronger positions than the Indian rupee. However, it soon fell to a ten-month low, and the decline is expected to continue as long as the war lasts. In another situation, this would benefit Thailand's tourism sector. However, this time concerns about international travel have led to the cancellation of many vacations.
According to Bloomberg, the authorities of Asian states are already preparing for the worst-case scenario in the energy sector. This refers to long and serious disruptions in hydrocarbon supplies.
