RBI Likely to Leave Rates on Hold Friday, ANZ's Goh Says

The video discusses the rise in US Treasury yields and its impact on Asia FX, particularly the Bloomberg JP Morgan Asia Dollar Index. It highlights the strong US economic growth and its adverse effects on emerging market currencies, especially in Asia. The video examines policy responses from Asian countries like India, Indonesia, and the Philippines, focusing on India's potential measures such as NRI bonds. It concludes with the Reserve Bank of India's monetary policy stance, suggesting that interest rate hikes may not effectively address rupee depreciation.

What is the main reason for the stress on emerging market currencies in Asia?

• Weakening of the Chinese Yuan

• Decreasing oil prices

• Rising U.S. Treasury yields and a strong U.S. dollar

• Strong growth in the European economy

Which countries are mentioned as trying to counteract the effects of rising U.S. yields?

• Thailand, Vietnam, and Malaysia

• China, Japan, and South Korea

• Australia, New Zealand, and Singapore

• India, Indonesia, and the Philippines

What measure has the Indian government considered to address its current account deficit?

• Decreasing interest rates

• Implementing capital controls

• Increasing import tariffs

• Issuing non-resident Indian bonds

Why might the Reserve Bank of India choose to hold interest rates steady?

• To align with global interest rate trends

• To increase the value of the rupee

• Because inflation has fallen below the target

• To encourage foreign investment

What is a potential downside of encouraging firms to borrow externally in India?

• It could lead to a decrease in foreign reserves

• It might increase the current account surplus

• It may not be effective in a rising U.S. dollar environment

• It could strengthen the rupee too much