This year, the cost of hedging in Asia is expected to decline, and emerging market currencies may lose support

Due to relatively high interest rates in the United States, it is expected that hedging costs in Asia will decrease this year. Bloomberg data shows that the three-month hedging cost index in Asia reached its highest level since October 2022 at the end of last year, suppressing inflows of hedging investments. Experts point out that if the Federal Reserve does not quickly cut interest rates, hedging costs are expected to decrease, providing dollar investors with lower hedging costs. Despite the Federal Reserve's policy turning hawkish, Indonesia, the Philippines, and South Korea are expected to cut interest rates by 75 basis points each to address economic growth pressures