Asian currencies have dropped back sharply in recent days, and with no end in sight to the crisis, further big falls are likely. For most countries, weaker currencies are not much to worry about. The exception is Indonesia. If the drop in the rupiah continues, the central bank may have to pause its easing cycle.
Meanwhile, the rapid spread of the coronavirus across South East Asia means countries like Indonesia and Thailand will soon have to introduce the kind of draconian restrictions on the movement of people and commerce that are already in place in Malaysia and the Philippines. These measures will drag heavily on economic growth, and a sharp slowdown looms.
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