War Turmoil Saps Asian Reserves With Philippines, India Hit Most

Foreign-exchange reserves are slumping across Asia as policymakers spend reserves to defend their currencies against the oil-price spike triggered by the Iran war. The combination of higher energy costs and FX intervention points to tighter external balances and increased pressure on Asian currencies. This is a broad risk-off geopolitical shock with potential spillovers across emerging markets and regional monetary policy.

Analysis

Foreign-exchange reserves are slumping across Asia as policymakers spend reserves to defend their currencies against the oil-price spike triggered by the Iran war. The combination of higher energy costs and FX intervention points to tighter external balances and increased pressure on Asian currencies. This is a broad risk-off geopolitical shock with potential spillovers across emerging markets and regional monetary policy.