Many currencies have depreciated sharply against the US dollar The "strong dollar" has put the world economy at greater risk

Jimu News

2024-04-29 10:12Published on the official account of Hubei Chutian Metropolis Daily

CCTV News: The yen is not the only currency that has continued to depreciate recently, recently, the exchange rate of the local currencies of many countries such as the South Korean won, the Indian rupee, and the Indonesian rupiah has fallen sharply against the US dollar, causing market concerns about the stability of the capital markets of emerging economies. Analysts say the main reason for the sharp depreciation of the relevant currencies is the so-called "strong dollar", that is, the Fed's policy has led to a sharp appreciation of the dollar, and capital has returned from emerging markets, exacerbating the risks faced by emerging economies and the world economy.

The Bank of Japan decided on the 26th to keep the current monetary policy unchanged. As a result, the yen continued to depreciate against the dollar, with the yen falling below 158 yen per dollar, the lowest level since May 1990. In addition, the current exchange rate of the won against the US dollar has also fallen to nearly 1,380 won to 1 dollar. At the same time, Asian currencies such as the Indian rupee, Indonesian rupiah, Malaysian ringgit, Vietnamese dong and Philippine peso have continued to walk out of the downward curve.

In Japan, the sharp depreciation of the yen has brought severe imported inflation, and consumption has been under pressure against the backdrop of rising import costs. Japanese economic analysts said that the depreciation of the yen will lead to another rise in food and energy prices. In South Korea, the depreciation of the won has led to higher inflation due to heavy dependence on imports for food and energy. In March, South Korea's consumer price index rose 3.1% year-on-year, exceeding market expectations and the Bank of Korea's target range. In countries such as Indonesia and Vietnam, the sharp depreciation of local currencies has made it more difficult to repay large external debts and interest due to high current-account deficits, inflation and high levels of external debt, posing greater risks to economic stability.

When talking about the depreciation of many Asian currencies, the vast majority of analysts attribute the reason to the "strong dollar". Fed Chair Jerome Powell's previous hint that the Fed is not in a hurry to cut interest rates triggered a change in investor psychology. The dollar index, which measures the greenback against six major currencies, soared to new recent highs, directly leading to a "sell-off" in many Asian currencies. As the current geopolitical tensions continue and inflation in the United States remains high, once the Fed continues to maintain the benchmark interest rate at the current high level for a long time, it may exacerbate the depreciation of other countries' currencies, so that funds continue to flow to the United States, leading to more turbulence in the global capital market.

(Source: CCTV News)

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