Monday, October 15, 2007


Asian currencies have been rising against the US dollar over the past few years.

Faced with large sustained foreign fund inflows, a weakening US Dollar, and rising local inflation, Asian central banks have been allowing local currencies to appreciate against the USD.

Large foreign exchange reserves across the region, are a testament to the central bankers attempts to stall runaway rallies in their currencies.

China's foreign exchange reserves now at over $ 1.43 trillion, have resulted in repeated calls for appreciation in value of the Chinese Yuan.

Asian central bankers have been using strong local currecies to fight inflation, given their large oil and food imports. However rising currencies have now started to affect exports, worse still at a time when the US economy is slowing down.

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