Central Banks in Asia Easing Up on Currency Intervention

Weaker greenback, fear of US displeasure during tariff negotiations among reasons

- 

Some of Asia's biggest central banks in emerging markets look to be dialing back their interventions in the currency market.

The central banks of India and Malaysia have reduced the size of some derivatives positions they use to weaken their currencies.

Taiwan has allowed its currency to surge against the US dollar in recent weeks and dropped hints that it would be comfortable with more if the moves were "orderly."

South Korea's giant national pension fund has ended its five-month support of the won.

A major reason for these moves is a simple change in the market landscape: The US dollar has tumbled more than 7 percent in 2025, easing pressure on emerging market currencies.

But strategists and investors also point to the risk of a backlash from US President Donald Trump, amid rising speculation that currency policies will be on the table during a series of ongoing and high-stakes tariff negotiations.