The Economist Intelligence Unit (EIU), an economic analysis agency, said Asian currencies are likely to weaken for another quarter after the U.S. Federal Reserve (Fed) continued to raise interest rates.
The EIU expects the Fed to raise rates again in November and December. And it is more likely that the Fed will raise rates earlier than the EIU expects.
The dollar index, which measures the U.S. dollar against a basket of currencies, has increased by 15% since the beginning of 2022.
In the EIU’s view, the risk of a repeat of the 1997 financial crisis in Asia is low because Asian countries’ foreign exchange reserves are at a higher level than in 1997.