Rise of US dollar forwards builds risks in Asia
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.
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. What's Your Reaction?
