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The rupee may remain under structural depreciation pressure despite the Reserve Bank of India’s efforts to rebuild its foreign-exchange war chest, with domestic brokerage firm Systematix estimating a new average annual depreciation path of around 6.5 per cent for the currency.In its latest India economy report, Systematix said the RBI’s foreign-currency mobilisation could provide temporary stability, but argued that the underlying forces driving rupee weakness have not been resolved. Without aggressive RBI intervention, the Indian currency could already have crossed the ₹100-per-dollar mark, according to the research house.Systematix noted that the rupee has depreciated about 17 per cent over the…

Commerzbank’s Charlie Lay reports that the Bank of Korea (BoK) delivered a second consecutive 25 bp hike to 3.0% and kept a tightening bias, supporting KRW after its sharp appreciation since June. The bank expects a near-term pause but sees scope for another hike to 3.25% if growth and core inflation stay firm, with USD/KRW likely consolidating in a 1,360–1,400 range.Won strength seen consolidating after rally”Looking ahead, BoK maintained a tightening bias, although the pace of further hikes is likely to slow following the cumulative 50bp of tightening since July.””The results showed that of the 21 dots, 10 are at…

DBS Group strategists Taimur Baig and Nathan Chow forecast Vietnam’s goods exports to maintain strong double-digit growth at 27% year-on-year in August 2026, led by electronics and supported by external demand. Retail sales and tourism-related spending are seen as resilient, while headline inflation is expected to hold at 4.4%, below May’s peak but still elevated due to firm food and housing costs.Electronics exports drive strong momentum”We expect Vietnam’s goods exports to extend their run of robust double-digit growth, expanding by 27.0% yoy in August 2026, up from 25.0% yoy in July, driven primarily by strong electronics shipments amid supportive external…

Commerzbank’s Charlie Lay reports the Bank of Korea has delivered back-to-back 25bp hikes to 3.0%, front-loading tightening as growth and core inflation forecasts rise. The bank signals one more hike over six months but may pause to assess effects. Despite strong fundamentals and a huge current-account surplus, further KRW gains versus USD are expected to be more gradual after a 12% rally.Front-loaded tightening and slower KRW gains”Looking ahead, BoK maintained a tightening bias, but the pace of further hikes is likely to slow after the cumulative 50bp increase since July.””BoK provided some forward guidance, by way of its new six-month…

DBS Group Research economists Radhika Rao and Chua Han Teng note that Bangko Sentral ng Pilipinas (BSP) raised its policy rate by 25 bps to 5.0% to anchor inflation expectations and support the Peso. Philippine Peso (PHP) is the only ASEAN-6 currency weaker in 3Q26 versus the Dollar, and DBS flags above-target inflation as leaving room for one more measured BSP hike this year.Peso underperforms peers in 3Q26″The Philippines’ BSP hiked its benchmark rate by 25bps to 5.0% yesterday, in line with our expectations, in a bid to contain inflation expectations and support the currency.””The peso is the only ASEAN-6…

ING’s Chris Turner reports that the Korean Won (KRW) continues to advance, driven by back-to-back Bank of Korea (BoK) rate hikes to 3.00% and a Dot Plot pointing to 3.25% in six months. Upgraded Gross Domestic Product (GDP) forecasts linked to a chip export boom underpin the currency, though authorities may worry about KRW/JPY highs and USD/KRW looks due for consolidation.BoK tightening and export-led growth”The Korean won continues its advance. The driver this week has been back-to-back rate hikes from the Bank of Korea, with the policy rate now a reasonably high 3.00%. The Bank of Korea has its own,…

DBS Group strategists Taimur Baig and Nathan Chow expect Bank Negara Malaysia (BNM) to keep its Overnight Policy Rate unchanged at 2.75% on September 3, maintaining the stance adopted after its July 2025 insurance cut. They highlight contained Malaysian inflation and robust 2026 growth near 5%, arguing there is little urgency for rate hikes despite some market expectations.BNM expected to stay on hold”We expect BNM to maintain its Overnight Policy Rate (OPR) at 2.75% on September 3, unchanged since its 25bps insurance rate cut in July 2025.””The central bank will likely continue assessing that the current monetary policy stance remains…

The Mexican Peso (MXN) depreciates against the US Dollar (USD) on Friday, down by over 0.42% on hawkish remarks by Federal Reserve (Fed) Chair Kevin Warsh at the Jackson Hole Symposium. This prompted investors to price in a potential rate hike in 2026, a tailwind for the Greenback. The USD/MXN pair trades at 17.04, after bouncing off daily lows of 16.94.USD/MXN weakens after Jackson Hole remarks revive Fed tightening expectationsWarsh’s speech set the tone for markets, which were uncertain whether the new Fed Chair would provide some guidance. Although he emphasized that the US central bank would become more “quiet,”…

Commerzbank’s Volkmar Baur challenges recent internal analysis on CNY undervaluation and exports, arguing that China’s exchange-rate management and gold purchases point to deliberate weakening. He highlights China’s outsized export and trade-surplus gains since 2019 and notes that a roughly 20% real exchange-rate advantage is unlikely to be neutral for global trade flows.Exchange-rate policy and export dominance”Between 2019 and the end of 2025, China increased its real exports by 47%, while global trade grew by only 15% over the same period. China has therefore gained market share somewhere in the world. During the same period, China’s trade surplus rose from about…

India’s foreign exchange reserves touched a record high of $729.3 billion as of August 21, after banks stepped up the drive to mobilise NRI deposits under the central bank’s concessional swap window in the final two weeks before it closes on August 31.Reserves increased $12.4 billion during the week, with foreign currency assets increasing $9.4 billion to $591 billion, while the value of gold reserves rose by $2.8 billion to $114 billion. Forex reserves last touched a high of $728 billion late February this year. As of August 21, Indian banks have mobilised $65.4 billion in foreign currency non-resident (FCNR-B)…