Despite many Asian currencies alleviating this year and the value of commodities hitting new lows, the effect on each country in the region has been different with India benefiting, Indonesia witnessing mixed blessings, and Malaysia and Australia being significantly hurt.
Major commodity consumers like India are gaining from lesser import costs for fuels and raw materials as a minor dip in the INR this year depicts that their purchasing power has not been worn out. The INR shacked less than 3 pct against the USD this year, weighed against a 12 pct topple last year.
Indonesia, one of the world's top importers of oil products, is enjoying the gains of an almost 50 pct plunge in crude oil prices since June and a lesser fall in the IDR. But Indonesia's returns from coal, of which it is the world's top exporter, dropped a quarter this year.
Countries like Malaysia and Australia, which depend on commodity exports for revenues while importing most of the other goods, face a threat from the recent. Plunging revenues from crude oil for Malaysia, or iron ore and coal for Australia are also bringing down their currencies, making imports dearer and intimidating Australia's first recession in 20 years.
«In energy and bulk commodities, supply growth still remains strong and should only add to the (negative) macro headlines … The stronger US$ and tightening monetary policy in the U.S. will have slightly negative repercussions for commodities,» ANZ bank said in a recent note.
The material has been provided by InstaForex Company – www.instaforex.com