Bloomberg.com, The Asian nations hit hardest 20 years ago by a crisis that sent currencies and stock markets tumbling, saw governments fall and pushed millions back into poverty, now have some of the strongest buffers in the world.
But that resilience faces a fresh test. The world’s biggest central banks are either removing monetary stimulus or mulling ways to do so—the same backdrop that helped unravel the Asian miracle a generation ago. That could suck liquidity out of emerging markets, pressure currencies and raise the cost of dollar debt repayments. The following charts assess the region’s changing fortunes:
Asia’s currency reserves at well over $6 trillion make up more than half of the world’s holdings, led by China’s $3 trillion hoard. In 1996, Asia’s reserves were less than $1 trillion, leaving central banks short handed when their fixed and managed currencies came under speculative attack from investors including George Soros. Most of the countries now have floating exchange rate systems, reducing pressure on central banks to defend a particular level of the currency.