Fears of new Asian crisis as currencies fall

Capital outflows fueled by rising interest rates in the US sent currencies in Hong Kong, Japan, and India lower reminding one of the Asian financial crisis that happened 25 years ago.

The Hong Kong dollar fell to the weak end of its permitted 7.75-to-7.85 per greenback trading range yesterday as the US dollar hit a 20-year high.

Meanwhile, the yen fell more than 0.5 percent to 135.19, the lowest since October 1998, as Treasury yields extended Friday's inflation-shock driven gains. It has tumbled almost 15 percent this year - the worst-performing major currency - as the Bank of Japan keeps rates anchored to boost a sluggish economy while US yields surge on bets for continued Federal Reserve hikes.

Also, the Indian rupee slid as much as 0.6 percent to a new record low of 78.2825 per dollar, after having hit a series of lows in recent days.

This came as crypto lender Celsius Network paused withdrawals, swaps and transfers on its platform, fueling a broad cryptocurrency selloff and prompting a competitor to announce a potential bid for its assets.

Crypto markets tumbled after the Celsius announcement, with Bitcoin dropping as much as 14 percent to below US$25,000 (HK$195,000), the lowest level since December 2020 and other major tokens like Ether also falling sharply.