The Philippines is entering the fifth week of the war in West Asia with its currency at its lowest in history at more than PHP60 to a US dollar, making its scramble for more supply of fuel from abroad even more difficult and expensive.
While the Thailand Baht had the biggest dive in currency value among the most traded currencies in East Asia since the war started last February 28, it is not the Kingdom’s lowest ever, unlike the Philippines.
The Thai Baht depreciated by 5.10% and is now trading at 32.49 per 1 US$ while the Philippine Peso is at 60.55 to a US$, weakening by 4.87% in the last four weeks.
It is not just the Philippines and Thailand that have failed to defend their currencies from the effects of the war in the region where countries source much of their crude oil and gas.
Even the mighty South Korean economy is feeling the pinch with the Won suffering a 4.54% hit compared to the US dollar. It is now worth 1,508.56 KRW per 1 US$, a 17-year low.
The Taiwan Dollar and Japanese Yen are undergoing mild depreciations at 2.07% and 1.71%, respectively. The Taiwan Dollar is worth 32.04 to 1 US$ while the Japanese Yen is at 160.29 to 1 US$.
The Indonesian Rupiah and the Vietnamese Dong are weathering the storm at an identical 1.12% depreciation rate against the US Dollar since the US and Israel started hostilities. The Rupiah is at 16,990.8 while the Dong trades at 26,337 to 1 US$.
Expectedly, the Chinese Yuan feels the crunch the least with a “slight” depreciation of 0.78% due to its massive economy and foreign currency surplus. The Yuan currently trades at 6.91 to 1 US$.
The downward trend in the region’s currencies is primarily blamed on the Middle East War and the rising global oil prices that trade on the US Dollar.
Countries that have a wide trade deficit, high inflation, and increased capital outflows suffer the economic shock more intensely such as the Philippines and Thailand.
With reports of Yemeni Houthi militants joining the fray and promising to disrupt shipping lanes in the Red Sea, East Asian countries are expecting things to get even worse this week. # (Raymund B. Villanueva)
