News / Asia

Stronger Asian Currencies Cause Concern for Exporters

Fears are emerging that the rise in Asia's currencies against the U.S. dollar will undermine the region's exports. Economists say companies face narrowing profit margins in a competitive global market.

Asian currencies have been on the rise against the U.S. dollar since the year's start.

The Japanese yen, Malaysian ringgit, Thai baht, Indonesian rupiah and Singapore dollar, among others, have risen by three to eight percent over the dollar.

Most Asian economies rebounded strongly from the global financial crisis that began in 2008. On the other hand, the major developed economies, including the United States, still are struggling to recover.

In Southeast Asia, particularly, investment money is flowing in, and output rising.

But economists and industries warn that stronger currencies are starting to hurt exporters.

Asia's export-driven economies have long relied on cheap currencies to boost growth. Now regional agricultural and industrial producers are seeing that edge disappear - stronger currencies make their goods more expensive overseas.

And that makes business harder, since their major markets - the developed economies - remain weak.

Shamika Sirimanne is a trade economist with the United Nations in Bangkok.  "The global recovery is very tentative at the moment and yes the Western markets are opening up but not as fast as you'd like to see. So for the countries in this region competition is very fierce. And if the exchange rate is holding them back this is going to create big problems for exporters," Sirimanne said.

In Thailand, the central bank says capital inflows and investment have lifted the baht's value by more than six percent against the dollar. Exports, strong at the start of the year, are starting to slow, with growing competition from key competitors such as Vietnam.

Vichai Siriprasert is the honorary president of the Rice Traders Association of Thailand. "As a whole because Thailand exports a lot, when the currency is strong it will hurt all the sectors, all the export sectors, including rice," Vichai said. "I think it's to our interest to keep the currency stable, not to be weaker, not to be stronger, but to be stable if you can. That would be the best policy. But now we are climbing now to be one of the strongest."

Vichai, like many businesspeople in the region, complains that some Asian nations control the value of their currencies, and keep them from appreciating.

For instance, he says Hanoi's depreciation the value of its currency over the past year gave Vietnam a larger share of the global rice market. Vietnam does not allow its currency to trade freely in foreign exchange markets, the way the baht does.

Economists and manufacturers around the world also have complained for years that China keeps its currency artificially low. Beijing in June said it would let its yuan move more against the dollar and other currencies. However, the yuan's value has changed little.

Economists say Asia's export industries face narrowing profit margins in the months ahead, raising concerns of unemployment and slowing growth around the regions.

You May Like

Video Experts Warn World Losing Ebola Fight

Doctors Without Borders says world is losing battle against Ebola, unless wealthy nations dispatch specialized biological disaster response teams More

Video Experts: Rise of Islamic State Significant Development in Jihadism

Many analysts contend the group - which grew out of al-Qaida in Iraq - has been rebuilding for years More

US-Based Hong Kongers Pledge Support for Pro-Democracy Activists

Democracy advocates call on Chinese living abroad to join them in opposing new election rules for their home territory More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Larger Than Life Chinese Lanterns Make Southern California Appearancei
X
Elizabeth Lee
September 02, 2014 8:57 PM
Chinese lanterns with a long history are lighting up in 21st century style at the Los Angeles County Fair in southern California. Visitors can see traditional lanterns that hang, but also lanterns in the shape of animals, iconic landmarks and many other objects, all created by artisans from a place in China known for its lanterns. Elizabeth Lee has the details from the fair in the city of Pomona.
Video

Video Larger Than Life Chinese Lanterns Make Southern California Appearance

Chinese lanterns with a long history are lighting up in 21st century style at the Los Angeles County Fair in southern California. Visitors can see traditional lanterns that hang, but also lanterns in the shape of animals, iconic landmarks and many other objects, all created by artisans from a place in China known for its lanterns. Elizabeth Lee has the details from the fair in the city of Pomona.
Video

Video Experts See Rise of ISIS as Significant Development

The Islamic State’s rise seems sudden. It caught the U.S. by surprise this summer when it captured large portions of northern Iraq and spread its wings in neighboring Syria. But many analysts contend that the group - which grew out of al-Qaida in Iraq - has been rebuilding for years. VOA's Jela de Franceschi takes a closer look at the rise of ISIS and its implications for the Middle East and beyond.
Video

Video Israel Concerned Over Syrian Rebels in Golan

Israeli officials are following with concern the recent fighting between Syrian rebels and government forces near the contested Golan Heights. Forty-four U.N. peacekeepers from Fiji have been seized by Syrian Islamist rebels and the clashes occasionally have spilled into Israel. VOA’s Scott Bobb reports from Jerusalem.
Video

Video Ukraine Schools Resume Classes, Donate to Government Forces

A new school year has started in Ukraine but thousands of children in the war-torn east are unable to attend because of ongoing clashes with pro-Russia rebels. In Ukraine's capital, patriotic education has become the norm along with donations to support injured security forces fighting to take back rebel-held areas. VOA's Daniel Schearf reports from Kyiv.
Video

Video US Detainees Want Negotiators for Freedom in North Korea

The three U.S. detainees held in North Korea were permitted to speak with foreign media Monday. The government of Kim Jong Un restricted the topics of the questions, and the interviews in Pyongyang were limited to five minutes. Each of the men asked Washington to send a representative to Pyongyang to secure his release. VOA’s Carolyn Presutti has our story.
Video

Video Turkmen From Amerli Describe Survival of IS Siege

Over the past few weeks, hundreds of Shi'ite Turkmen have fled the town of Amerli seeking refuge in the northern city of Kirkuk. Despite recent military gains after U.S. airstrikes that were coordinated with Iraqi and Kurdish forces, the situation remains dire for Amerli’s residents. Sebastian Meyer went to Kirkuk for VOA to speak to those who managed to escape.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered at the Union League Club in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.

AppleAndroid