A lesson learned

Greater liquidity in local forex derivatives markets along with a better awareness of risk has meant that Asia’s end-users have reacted calmly to US dollar volatility. Roger Hogan reports

The Asian crisis taught the continent’s corporates and asset managers an important lesson. For those domestic companies that borrowed in US dollars with little thought of hedging, the collapse of several of the region’s pegs to the US dollar meant soaring debt servicing levels and, ultimately for some, collapse. This year’s volatility in the US dollar, however, has shown how far Asia’s markets have come in the five years since the onset of the crisis. Far from sending the region’s