Currency Defense Gets Makeover as Emerging Asia Guards Reserves

Currency Defense Gets Makeover as Emerging Asia Guards Reserves Central banks in emerging Asia are increasingly finding ways to support their currencies without dipping into foreign-exchange reserves, as recurring Middle East tensions and the prospect of higher-for-longer US interest rates keep policymakers on edge. India has lured nearly $40 billion from its diaspora via high-yield dollar deposits, underpinning a recovery in the rupee from a record low in May. South Korea’s push to accelerate corporate dollar repatriation has helped the won to its biggest monthly gain since 2022. Indonesia drew $1.6 billion in bond inflows in the last two months as it offered incentives to foreign funds, and Taiwan has also been instructing exporters to sell US dollars at times of currency weakness.