Asia currencies drop as dollar gains raise import costs

  • : Crude oil
  • 22/09/26

Asia-Pacific currencies fell further against the dollar in Asia trading today, adding to costs for the region's big importers of oil and other commodities, while the UK pound slumped by almost 5pc to a near 40-year low.

The Korean won, Japanese yen and Indian rupee all weakened against the dollar in early trading, extending multi-year lows.

The Chinese yuan weakened to above Yn7.15 to the dollar. That prompted China's central bank to intervene to prop up the yuan by raising the cost of shorting the currency, which weakened to more than Yn7 to the dollar earlier this month for the first time in over two years.

Aggressive moves by the US Federal Reserve to raise interest rates have boosted the value of the dollar against rival currencies in recent months. Oil and other commodities are priced in dollars, so a stronger US currency adds to costs for importers.

The biggest declines were recorded by the UK pound. Sterling dropped by 4.7pc against the dollar in early trading to as low as $1.03, before recovering slightly to just under $1.06 at 10.30am Singapore time (02:30 GMT), still down by around 2.6pc.

The UK government's plans to cut taxes, announced by the country's new chancellor Kwasi Kwarteng last week, have accelerated a sell-off in sterling.

Oil prices were largely steady, with the Ice front-month November Brent contract edging higher to $86.36/bl at 10.30am Singapore time. The contract slumped by almost 5pc to close at $86.15/bl on 23 September.


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Iraq to keep 3.3mn b/d crude export cap until year end


24/04/24
24/04/24

Iraq to keep 3.3mn b/d crude export cap until year end

Dubai, 24 April (Argus) — Iraq will stick to its pledge to cap crude exports at 3.3mn b/d until the end of the year, regardless of what the Opec+ coalition decides at its June meeting, sources with knowledge of the matter told Argus. Baghdad announced the 3.3mn b/d export limit last month , representing a 100,000 b/d cut compared with the first-quarter average. April's exports will be in line with recent months, according to the sources, indicating that Iraq has yet to adhere to the cap. The self-imposed limit on exports is part of Iraq's commitment to compensate for exceeding its 4mn b/d Opec+ production target in the first three months of 2024. It produced 211,000 b/d above target in January, then overshot by 217,000 b/d and 194,000 b/d in February and March, respectively, according to an average of secondary sources including Argus . Prior to that, Iraq exceeded its then 4.22mn b/d output ceiling in each of the last six months of 2023. The persistent overproduction has drawn scrutiny within Opec+, prompting repeated reassurances from Baghdad in recent months that it is committed to its output pledges. Iraq blames it on its inability to oversee production in the semi-autonomous Kurdistan region in the north of the country. Most Iraqi Kurdish crude output is being directed to local refineries or sold on the black market following the closure of the export pipeline that links oil fields in northern Iraq to the Turkish port of Ceyhan just over a year ago. Iraq's federal oil ministry says its Kurdish counterpart has stopped providing production data. Baghdad recently sent the Kurdistan Regional Government (KRG) an official request to hand over oil produced in the region to federal marketer Somo in order to resume Kurdish exports through Turkey, the sources said. Baghdad also urged the KRG back in January to curb output to help Iraq adhere to its lower Opec+ production quota. Ever-widening gap The Association of the Petroleum Industry of Kurdistan (Apikur) said international oil companies (IOCs) operating in the region were hoping that a long-awaited visit to Baghdad by Turkish president Recep Tayyip Erdogan on 22 April might help pave the way for a restart in exports. "We definitely believe the Iraqi government seems more serious about resolving the issues after prime minister [Mohammed Shia] al-Sudani's visit to the US," an IOC source told Argus. But differences between the KRG and Baghdad, mainly over contracts that the former signed with international oil companies (IOCs) in Kurdistan, continue to delay the restart. And tensions between the two sides show little sign of easing. In a statement on 22 April, the KRG's ministry of natural resources accused Baghdad of misleading statements by seeking to blame the KRG for the export shut-in, adding that there is no provision in Iraq's constitution that gives power to the federal government to approve contracts issued by the KRG. With the help of multiple federal court rulings, Baghdad has been attempting to downgrade the KRG's autonomy over its finances and energy sector. A court ruling in February 2022 overturned a law governing Kurdish oil and gas exports and upheld Baghdad's request that all KRG production-sharing contracts be placed under federal oil ministry oversight. The judgment rendered the KRG's 2007 oil and gas law unconstitutional, raising questions over the future of the KRG's active contracts. The KRG's natural resources ministry has dismissed the February 2022 court order, saying it was delivered by a "committee of political appointees in Baghdad". While the federal Iraqi oil ministry "publicly refers to that committee as the 'Federal Supreme Court', everyone knows that it is no such thing", the ministry said. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

EU adopts sustainability due diligence rules


24/04/24
24/04/24

EU adopts sustainability due diligence rules

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Libya eyes progress on Eni-led oil and gas project


24/04/24
24/04/24

Libya eyes progress on Eni-led oil and gas project

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Oman latest to insist that oil, gas is 'here to stay'


24/04/24
24/04/24

Oman latest to insist that oil, gas is 'here to stay'

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