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Asian Currency Defenses Strained as Oil Shock Drains FX Reserves

Central banks across Asia are depleting foreign-exchange reserves at an accelerating pace to prop up currencies amid crude oil price spikes tied to Middle East tensions, with India and the Philippines facing the sharpest pressures.

India has implemented multiple emergency measures to stabilize the rupee, including tariff increases on gold and silver imports. Prime Minister Narendra Modi urged citizens to halt gold purchases for one year to preserve reserves. India is also considering additional steps such as curbing non-essential imports and adjusting fuel prices.

Economists said India's FX buffer remains adequate above historical stress thresholds, though the defensive spending reflects heightened concerns about currency stability. The Philippines similarly faces reserve depletion as regional policymakers juggle competing pressures from oil-driven inflation and currency depreciation. The scale of intervention signals broad anxiety among Asian monetary authorities about sustained energy price elevation.