By Indranil Sarkar

(Reuters) – Bearish bets have firmed on many Asian currencies, a Reuters survey found Thursday. This is because several regional central banks are trailing the U.S. Federal Reserve when it comes to tightening their monetary policy in order to combat red-hot inflation.

The first time analysts have stopped short of the was in October, due to concerns about an economic slowdown in country. This is according to the 14-response poll.

Analysts at Maybank noted that a combination of low policy support and a zero-COVID position has hurt China’s potential growth and negatively impacted yuan sentiments.

Southeast Asian central banks have sought to balance lifting interest rates off historic lows — to tackle price pressures exacerbated by the Ukraine war — and supporting economic growth as the region emerges from a coronavirus-driven downturn.

The market participants increased short positions on Malaysian ringgits to the highest level since late August, while in the case of Thai bahts the position was at its largest since December early.

Last week, Thailand’s central banking said that it would focus its monetary policy efforts to boost sluggish economic growth in Southeast Asia’s second-largest country. It continued to view inflationary pressures only as temporary.

The Indian rupee, the Philippine peso and Taiwan were all subject to bearish betting.

This dim outlook on emerging market currencies is set against the background of an increasing U.S. Dollar and expectations for more Fed rate increases. This week saw the currency reach a peak of two years against a basket a currencies.

Mitul Kotecha, senior EM strategist for TD Securities, stated that Asian currencies are generally under pressure as U.S. yields moved higher this month, which has helped propel the USD and capital outflows have accelerated.  

If the U.S. yields are lower than expected, it is difficult to expect any improvement in Asian currencies.

The Indonesian rupiah fell further after its central bank cut the 2022 growth forecast due to inflationary risks and geopolitical tensions.

While central banks of both South Korea and Singapore tightened their monetary policies, there was a rise in short positions on South Korea’s won while long positions in Singapore dollars were reduced.

Our Asian currency positioning survey focuses on how analysts and fund managers think the markets are currently positioned in nine emerging Asian currencies. These include the South Korean won, Chinese yuan and South Korean won.

This poll measures net long and short positions using a scale of 3-3 to 3. Scores above 3 indicate that the market is significant long in U.S. Dollars.

Figures include forward positions not delivered (NDFs).

These are the results of our survey (positions in U.S. Dollar versus each other):

USD USD USD or USD US Dollar USD DATE

CNY /KR/SG /IDTWD /IND/ /PH

W D R I MY P B

R

21-Apr–22 0.1 1.0 -0. -0. 0.94 0.7 0. 1 0.7

7 17 03 5 89 1

7-Apr-22 -0.4 0.9 -0. -0. 0.81 0.6 0. 0.5 0.3

1 9 46 05 3 32 3 1

24-Mar-22 -0.1 0.9 0.1 0.0 1.16 0.9 0. 1.4 0.4

6 8 9 4 9 12 6

9-Mar-22 -0.8 1.2 0.8 0.4 0.97 1.1 0. 0.8 -0.

5 2 9 05 9 08

24-Feb-22 -0.9 0.3 -0. -0. 0.33 0.0 0. 0.1 -1.

9 9 77 01 7 2 9 07

10-Feb-22 -0.9 0.8 -0. 0.4 -0.1 0.3 0. 0.7 -0.

9 5 98 6 8 2 1 4 31

27-Jan-22 -1.2 0.8 -0. 0.1 -0.1 0.1 0. 0.8 0

9 9 67 2 7 8 25 2

13-Jan-22 -0.7 0.9 0.2 0.2 -0.1 -0. 0. 0.7 0.6

3 7 2 5 29 28 1 1

16-Dec-21 -1.0 0.5 0.6 0.5 0.09 1.0 0. 0.2 0.3

7 3 7 4 7 84 6

2-Dec-21 -0.8 1.0 0.5 0.1 0 0.4 0. 0.2 0.7

8 6 8 5 7 28 6 1