(June 28): After years of building their foreign-exchange reserves, central banks in Asia are tapping into their stockpiles to bolster their weakening currencies against a rising US dollar. Thai reserves slid to US$221.4 billion as of June 17, in data released late last week. Reserves in South Korea and India are at their lowest in more than a year. This year, as the hawkish Federal Reserve boosts the US dollar, central banks have reversed the buying: Thailand and Indonesia are among those which have pledged to reduce volatility in their currencies. “Central banks in Asia tend to ‘lean against the wind’, using FX interventions to smooth exchange-rate adjustments,” said Frederic Neumann, co-head of Asian economics research at HSBC Holdings Plc.

Source: The Edge Markets June 28, 2022 10:52 UTC