News about exchange rates

The Reserve Bank of Australia is pushing back against the view that interest rates work mainly by punishing borrowers, and has shifted its messaging to stress the importance of the exchange rate for monetary policy. RBA modelling indicates that exchange rate movements triggered by rate changes can account for as much as two-thirds of monetary policy's impact on GDP and inflation.

The South African rand edged up roughly 0.2% in early Monday trade to 16.4475, as investors looked ahead to a busy week of economic data. The focus is on Finance Minister Enoch Godongwana's medium-term budget policy statement on Wednesday and September inflation figures. Nedbank expects headline inflation to rise to 4.8% in September from 4.4% in August, and retail sales growth to slow to 2.5% in August from 3.4% in July, with higher transport costs from fuel prices and rand depreciation as the main pressure. The 2035 benchmark government bond was little changed, with its yield rising half a basis point to 8.7%.

On Monday, Vietcombank raised its dollar selling rate to VND26,100, up 0.08% from the weekend level, while the State Bank of Vietnam cut its reference rate by 0.02% to VND25,633, according to VnExpress. The dollar was trading near VND26,000 at unofficial exchange points. In international markets, the dollar index stood at 101.83, and the euro fell 0.1% to $1.1225 in early Asian trade, which Reuters linked to violent protests in France. The dollar traded at about 158 yen, the pound held at $1.3329, and the Australian dollar gained 0.3% to $0.6965.

Taiwan's central bank said it would step in to stabilize the foreign exchange market if the Taiwan dollar stays volatile after its sharp fall against the U.S. dollar last week. The currency fell NT$0.463 to close at NT$32.338 on Friday, its steepest weekly decline in more than a year. The Taiex dropped 2,202.18 points, or 4.47%, to 47,111.26, dragged down by large-cap tech stocks amid concerns about U.S. inflation, a more hawkish Federal Reserve and high valuations of AI stocks. Foreign investors net sold US$19.40 billion in local shares and pulled US$17.96 billion from Taiwan during the week, while the central bank noted the Taiex fell 5.4% versus a 15.7% drop in the Philadelphia Semiconductor Index and said the currency remained stable over the longer term.

Taiwan's central bank said it will step in to stabilize the foreign exchange market if the Taiwan dollar stays volatile after its sharp losses against the U.S. dollar last week. The currency fell NT$0.463 to close at NT$32.338 on Friday, its steepest weekly drop in more than a year. The Taiex fell 4.47% to 47,111.26 points, dragged by large-cap tech stocks amid concerns over U.S. inflation fueled by high oil prices and AI stock valuations. Foreign investors net sold US$19.40 billion in local shares and pulled US$17.96 billion out of Taiwan during the week. The bank said the currency remains stable over the longer term and will keep monitoring markets, intervening when necessary.

The Indian rupee rose 22 paise to 94.75 per US dollar on Monday as Reserve Bank of India (RBI) intervention supported the currency despite high crude prices. The currency is hovering near 95 per dollar, which experts see as the RBI's soft defence line, after its best weekly performance in nearly four years. Foreign institutional investors (FIIs) sold Rs 54,636 crore through October 16, though they turned marginal buyers in recent days, with experts citing a drop in the US 10-year yield to 5.08%. Brent crude briefly topped $110 a barrel on Friday before easing to around $108, after Trump waived new Russia sanctions that could boost Russian fuel exports.

The rupee gained 9 paise to 94.80 against the dollar in early trade, extending its recovery to a third straight session after closing at 94.89 on Friday. Traders said it was the sharpest rally in seven months, but high crude prices, rising U.S. Treasury yields and steady foreign outflows have kept pressure on, prompting the RBI to step up interventions. Brent fell 1.88% to $107.79 per barrel after surging to $110, amid attacks on vessels near the Strait of Hormuz and threats to Saudi energy infrastructure. The Sensex dropped 470.50 points to 74,318, while foreign institutional investors bought a net Rs 1,165.92 crore of equities on Friday. India's forex reserves fell $8.578 billion to $726.027 billion in the week ended October 9, after a $12.952 billion decline the previous week.

The rupee gained 9 paise to 94.80 against the U.S. dollar in early trade on Monday, October 19, 2026, supported by the Reserve Bank of India's structural forex interventions. Forex traders said it was the rupee's sharpest rally in seven months, but a surge in Brent crude to $110 per barrel remains the biggest threat to the recovery. High crude prices, rising U.S. Treasury yields and steady foreign capital outflows have pushed the RBI to step up its market interventions. The Sensex fell 470.50 points to 74,318, while foreign institutional investors bought a net ₹1,165.92 crore of equities on Friday. India's forex reserves dropped $8.578 billion to $726.027 billion in the week ended October 9.

The rupee gained 9 paise to 94.80 against the US dollar in early trade on Monday, supported by the Reserve Bank of India's structural forex interventions, with forex traders calling it the sharpest rally in seven months. The biggest threat is Brent crude, which has surged near USD 110 a barrel and was trading at USD 107.79 after a 1.88 per cent drop amid attacks on commercial vessels near the Strait of Hormuz. High crude prices, rising US Treasury yields and steady foreign capital outflows have pushed the RBI to step up intervention. Domestically, the Sensex fell 470.50 points to 74,318 and the Nifty dropped 147.10 points to 22,999.05, while FIIs bought equities worth Rs 1,165.92 crore on Friday. India's forex reserves fell USD 8.578 billion to USD 726.027 billion in the week ended October 9.

Japanese Prime Minister Sanae Takaichi has rejected criticism that she is responsible both for the weak yen and for pushing up interest rates. Speaking in parliament in response to opposition lawmaker Yoshifumi Hamano about a second supplementary budget, she said she clearly denied the accusations and that her government will build confidence in the yen through a strong economy. The yen has weakened to its lowest since 1986 and government bond yields have hit multi-decade highs, prompting Tokyo and even Washington to intervene in the currency market. Takaichi said she will appropriately control bond issuance, and Bloomberg reported that total issuance for 2026 will remain unchanged from the original budget plan, though experts were skeptical. Monex's Jesper Koll has said that spending cannot rise without increasing debt.

Asian currencies traded flat to slightly higher on Monday while the dollar held steady after a 0.4% weekly fall that ended a four-week winning streak. The yuan reached its strongest level since July 2022, with onshore USD/CNY down 0.1% to 6.6816, after China's third-quarter GDP grew 4.5% year on year, beating the 4.4% forecast. September industrial output rose 5.5% and retail sales 1.1%, but property investment fell 20.6% in the first nine months and fixed-asset investment dropped 7.2%, which could limit the yuan's gains. The yen was near 158 per dollar amid intervention fears, while the rupee posted its strongest weekly performance in nearly four years after Reserve Bank of India measures to curb dollar demand. The Australian dollar gained 0.4% and the won strengthened 0.2% against the dollar.

The euro fell 0.1% to US$1.1225 in early Asian trade, helping steady the dollar index at 101.83. French President Emmanuel Macron condemned 'shocking' violence at cost-of-living protests in a televised address, a day after France suffered one of its worst days of unrest in years. Analysts said the unrest affects the euro mainly through French bonds rather than directly. Elsewhere, the dollar was flat at 158.00 yen, Brent crude fell 1.7% to US$108.02 after Trump waived sanctions and tariffs on Russia, and bitcoin rose 1.4% to US$82,067.66.

The euro fell against most G10 currencies as the conflict in Ukraine escalated and protests spread across France, weakening confidence in the single currency. In early Asian trading, the euro dropped as much as 0.5% against the US dollar, touching 1.1183 USD/euro before trading around 1.1212 USD/euro at 7:02 a.m. Singapore time on October 19. Carol Kong, a strategist at Commonwealth Bank of Australia, said the euro could fall to support at 1.1130 USD/euro this week, especially if the dollar strengthens on geopolitical tensions. High energy costs threaten European economic growth and keep inflation risks elevated. The euro was the weakest G10 currency over the past month and last week fell to its lowest level since May 2025.

On the morning of 19 October, domestic gold prices were flat, with SJC gold bars quoted at 140.6 million dong to buy and 143.6 million dong to sell per tael at major dealers such as Sài Gòn and Doji. Phú Quý's SJC bars traded at 140–143.6 million dong and its gold rings at 140–143 million dong, while Bảo Tín Minh Châu's rings were at 138.7–142.7 million dong, up 100,000 dong from the previous session. International gold hovered around US$4,184 per ounce, equivalent to about 131.5 million dong per tael at the Vietcombank rate, leaving a gap of roughly 12 million dong with SJC bars. The State Bank's central rate stood at 25,633 dong per US dollar, down 4 dong.

In an interview with Beijing Review, Zong Liang, a senior researcher at the World Finance Forum, argues that the renminbi is not deliberately undervalued. He notes that the currency weakened until early April 2025 before recovering, and broke through 6.9 per dollar in February 2026, its highest level since April 2023. The PBOC says the RMB appreciated about 9% against the U.S. dollar since the start of 2025, yet three effective exchange rate indices edged lower because the dollar index fell 9.4%. Forex reserves reached $3.3579 trillion by late 2025, up 5%, mainly due to valuation effects rather than large-scale purchases. He adds that the record current account surplus reflects the gap between domestic saving and investment, not the exchange rate alone.

On October 8, the People's Bank of China (PBOC) issued a document on the renminbi exchange rate, rejecting claims that the currency is deliberately undervalued to gain an export advantage. China's trade growth accelerated to 15.3% in the first quarter, 18.3% in the second and 22.3% in the third, the fastest for the same period in five years, with equipment manufacturing driving nearly 90% of export growth. Exports of integrated circuits rose 99.1%, electric vehicles 72.3%, lithium-ion batteries 36.4% and wind turbine parts 22.4%. Experts attribute China's competitiveness to technology, quality and logistics rather than price, and the article cites PBOC data showing China's export share rising in periods when the RMB appreciated, suggesting the exchange rate alone cannot explain export performance.

The ringgit opened mostly higher against major currencies on Monday after Malaysia's advance estimate showed third-quarter 2026 GDP growth of 5.3%, stronger than expected and following 6.0% in the previous quarter. Against the US dollar, the ringgit was little changed at 4.0790/0855 at 8 am, versus Friday's close of 4.0795/0835. Bank Muamalat Malaysia chief economist Dr Mohd Afzanizam Abdul Rashid said stronger growth could reinforce expectations of possible monetary policy normalisation, and expected the ringgit-USD to trade between RM4.07 and RM4.08. Concerns over AI-related stock valuations could push investors toward safe havens such as US Treasury bonds, potentially supporting the dollar. The ringgit gained against the euro but weakened against the Japanese yen.

The won strengthened against the US dollar as export-driven supply of dollars grew, with exporters selling USD, supported by a semiconductor boom. The BoK's average won/USD rate for the first 12 trading days of October 2026 was 1,342.6, the lowest since September 2024, compared with 1,528 in June 2026. Average daily trade surplus in September 2026 was nearly $2.5 billion, far exceeding net foreign stock selling. The BoK raised its base rate to 3% in July and August 2026, and the IMF lifted its 2026 growth forecast for South Korea to 3.3%. Analysts expect the won to trade around 1,300 per dollar by year-end, but warn volatility may persist due to Middle East risks, oil prices and foreign capital outflows from the stock market.

The Bangko Sentral ng Pilipinas (BSP) posted net income of P170.2 billion in the first seven months of 2026, up 114.9 percent from the same period last year, according to preliminary, unaudited statements. That already exceeded its P124.6-billion earnings for all of 2025 by 36.6 percent. Most of the rise came from net foreign exchange gains, which nearly tripled to P102 billion and made up about 60 percent of net income. Total expenses fell 18.8 percent to P98.6 billion, mainly because interest expenses dropped 42.4 percent, while revenues edged up 1.9 percent to P166.8 billion, with interest income making up about 90 percent.

Puneet Pal of PGIM India Mutual Fund expects yields to keep trending higher as the RBI starts monetary tightening from its June policy meeting, with policy rates possibly rising 50-75 bps by the end of 2026. Money market yields up to one year, near 8%, are viewed as attractive for short-term investors. During the week, government bond yields rose 3-6 bps as the INR hit a record low of 96.83/USD and the RBI announced a USD 5bn buy/sell swap. Analysts expect the balance of payments deficit to be around USD 50bn, so measures to attract dollar inflows may soon follow, though he sees no comparison with 2013 since inflation is below 4%.

At a national roundtable organized by the Forum for Social Studies (FSS) with the Center for International Private Enterprise (CIPE), experts warned that Ethiopia's economic reforms are entering their most consequential phase, but a gap between policy and implementation could erode public confidence and delay the benefits of a market-oriented economy. Berhanu Denu, an economist at Addis Ababa University, welcomed economic opening but cautioned that reforms could raise inflation and reduce household purchasing power. He called for targeted support for groups facing temporary hardship, predictable policies, sensible reform sequencing, and progress tracked through measurable indicators. Participants also flagged limited access to foreign currency, financing constraints and a weak investment environment as obstacles for businesses.

Nifty fell 383 points to close at 23,063, its lowest since 6 April 2026 and its biggest one-session percentage drop since 8 July 2026, after a 225-point gap-down opening. PB Fintech (down 36%), Turtle mint (down 20%) and MFSL (down 10%) slumped after IRDAI issued a consultation paper proposing sweeping changes to insurance distribution. Nifty Midcap 100, Smallcap 100 and Microcap fell 2.25%, 1.53% and 1.48%, while the BSE advance-decline ratio dropped to 0.51. The rupee lost 21 paise to close at 95.95. Technically, the index broke below the 23,100-23,600 consolidation zone, with support seen near 22,700 and resistance at 23,300.

The article argues that President Tinubu is building a lasting legacy by combining the strengths of earlier Nigerian leaders with democratic and economic reform. It cites his role in forming the coalition that became the APC, which achieved Nigeria's first federal transfer of power from a governing party to an opposition party, and the Supreme Court's affirmation of the 2023 election result despite legal challenges. It also notes that he congratulated Governor Ademola Adeleke after the opposition Accord Party defeated the APC in Osun's August 2026 election, while acknowledging the controversy over the suspension of Rivers State's elected government. On the economy, the article credits the removal of petrol subsidies, unification of foreign-exchange windows and four 2025 tax laws, as real GDP growth rose from 3.38% in 2024 to 4.43% in Q2 2026. According to the IMF, gross reserves increased from about $40 billion to $46 billion during 2025.

VN-Index rebounded in the last session of the week to regain the 1,700-point level after four consecutive weeks of declines, but Pinetree analyst Nguyen Tan Phong said there is not yet enough evidence that the market has bottomed. Elevated domestic interest rates, inflation pressure from energy prices, exchange-rate pressure, and net selling of more than VND 3,000 billion by foreign investors on HoSE during the week remain key headwinds. Phong expects a technical rebound early next week, with near-term resistance at 1,715–1,750 points, but liquidity has not improved enough and cash flows may diverge ahead of the Q3 earnings reporting deadline on October 20. SGI Capital warns that prolonged high rates could weigh on bad debt, particularly from real estate loans, while very high margin debt is seen as a major market risk.