Rise of US dollar forwards builds risks in Asia

Feb 17, 2025 - 01:30
Rise of US dollar forwards builds risks in Asia

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Central banks in Asia, including RBI and Bank Indonesia, are increasingly using derivatives to protect their currencies against the strong dollar. The RBI's short forward dollar position reached $68 billion in December, while Bank Indonesia's hit $19.6 billion. This strategy raises concerns about potential deferred selling pressure instead of removing it, suggesting possible future risks.

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