The impact of the current turmoil on Emerging Asia has so far been relatively small, and most currencies have appreciated against the US dollar over the past week. Large current account surpluses mean countries in Asia are less exposed to sudden shifts in global risk appetite, while banking sectors (India is the key exception) generally appear to be in good health. Our biggest concern is that the collapse of SVB and the problems at Credit Suisse lead to a tightening of financial conditions and a downturn in economic growth in the US or euro-zone, weighing on demand for the region’s exports.
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