Foreign currency borrowing at new high in Asia

London

FOREIGN currency borrowing of Asian governments and corporations has soared to new heights, helping finance companies and boosting growth.

But the danger lies in the potential appreciation of the US dollar and other exchange rates against Asian and other emerging nation currencies. If, for example, the US dollar rises, the interest and loan repayment cost in local currency terms increases and places financial pressure on the borrower. Emerging-nation borrowers were squeezed during the Asian crisis of 1997 to 1998 and also in 2013 and 2014.