Most ASEAN currencies will depreciate only marginally against the USD in 2023

ASEAN currencies will be under much less downward pressure in 2023 due to easing global headwinds

Due to the improved performance of ASEAN currencies in 2023, firms are likely to face less import cost pressure than they did last year. The baht and the Singapore dollar will be the best-performing currencies in the region, and their appreciation should help ease import price pressures in local currency terms. Meanwhile, the other ASEAN currencies’ depreciation will continue elevating the cost of imports in local currency terms, but the pressure will be much less intense than it was in 2022. As currency volatility is likely to be more subdued this year across markets, executives will not need to build as much flexibility into their currency forecasts as they did last year.


On average, ASEAN currencies have appreciated by roughly 5.9% in the last six months relative to the USD, in large part due to much more gradual monetary tightening by the US Federal Reserve (Fed). We believe the US Fed is now reaching the end of its rate hike cycle and will likely only hike rates one more time—by 25 basis points—before holding them steady through the rest of 2023.

Our View

 Overall, ASEAN currencies will perform better in 2023 compared to 2022 due to a major slowdown in rate hikes by the US Fed, less pressure from global commodity prices, and a faster tourism recovery due to the return of Chinese tourists. However, performance will vary across individual currencies due to differing domestic fundamentals. We expect the peso and the ringgit to depreciate marginally due to reduced monetary tightening by the respective central banks. The rupiah will also be under depreciatory pressure as Bank Indonesia holds rates to support growth. Meanwhile, the State Bank of Vietnam’s decision to cut the benchmark interest rate will expose the dong to additional depreciation in 2023. On the other hand, we expect the baht to appreciate due to continued rate hikes by the Bank of Thailand and a rapid recovery of the tourism sector. The Singapore dollar will be the top-performing currency in the region. The SGD has already recovered back to pre-2022 levels due to aggressive currency intervention by the Monetary Authority of Singapore. With the US Fed now nearing the end of its rate hike cycle, the SGD will likely appreciate in 2023.

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