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

EU Court Fines Poland for Hosting CIA 'Black Sites'

Ruling is first time a court has acknowledged suspects were held and tortured at the sites, under US program launched following the 9/11 terrorist attacks More

Migrant Issues Close to Home Spur Groups to Take Action

Groups placing water, food in the desert, or aiding detainees after release, have one common goal: no more deaths of migrants crossing illegally into the US More

Video At AIDS Conference, Prevention Pill Stirs Excitement

Truveda shows promise, spurring debate over access and other approaches 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.
Treatment for Childhood Epilepsy Heats up Medical Marijuana Debatei
X
Shelley Schlender
July 24, 2014 6:43 PM
In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video Death Toll From Israel-Gaza Conflict Surpasses 700

Gaza officials say a shelling hit a compound housing a United Nations-run school in the Gaza Strip, killing more than a dozen people, during an Israeli offensive in the area. Heavy fighting between the Israeli military and Hamas militants continued on Thursday, pushing up the death toll. So far, more than 730 Palestinians and 35 Israelis have been killed in the conflict. VOA's Scott Bobb has the latest from Jerusalem.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video Israel Targets Gaza Supply Tunnels

The Israeli military has launched a ground operation in Gaza to destroy the myriad tunnels that may have been used to smuggle weapons to Hamas. VOA's Zlatica Hoke reports that could mean more hardship for the people of Gaza, who obtain some of their essential supplies through these underground passages
Video

Video Researchers Target Low-Cost Avatar Technology

Scientists at the University of Southern California Institute for Creative Technologies say 3-dimensional representations could revolutionize social media. Elizabeth Lee has more from Los Angeles.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.

AppleAndroid