The strength of a currency, measured mostly as its exchange rate with the US dollar, can affect one in many ways. A strong currency can make imported goods cheaper and also enable one to go on a vacation abroad without blowing the budget. On the flipside, it can pose a challenge to export growth by making a nation’s currency expensive overseas (to buy goods from a nation, one needs to purchase its currency using its own).
Ironically, one of the main reasons a currency gains value is a nation’s rising volume of exports which enables it to accumulate forex. Interest rate hikes by central banks, which typically attracts foreign investment, also pushes up the value of a currency by increasing its purchase. Rising gross domestic product (GDP) and balance of trade and lower levels of debt – all indicative of a growing economy – contribute to a currency’s rise as well.
Fulfilling all the aforementioned criteria many Asian currencies have seen stellar rise in the past one year. A weakening greenback owing to the possibility of a trade war sparked by Trump administration’s stance on free trade and also by comments by the US treasury secretary that a weaker dollar will bode well for US exports have positively impacted their values too.
Scroll down to find out currencies of which nations have made phenomenal progress and why.
Malaysia: Malaysian Ringgit
USD1 = MYR3.95
Appreciation against the US dollar from 1 January 2017 to 26 January 2018: 15.9 percent
Thailand: Thai Baht
USD 1 = THB 31.87
Appreciation against the US dollar from 1 January 2017 to 26 January 2018: 14.3 percent
Taiwan: Taiwan Dollar
USD 1 = TWD 29.76
Appreciation against the US dollar from 1 January 2017 to 26 January 2018: 11.3 percent
Singapore: Singapore Dollar
USD 1 = SGD 1.34
Appreciation against the US$ from 1 January 2017 to 26 January 2018: 10.9 percent