U.S. rates hike is rattling many emerging markets but its hawkishness also brings cheer for a small group of Asian economies that would not even mind seeing their currencies wane.

This year, Fed rate hikes and the prospects of more have elevated Treasury yields, prompting investors to switch out of riskier emerging market debt and triggering sharp falls in their currencies.

Emerging Markets

Markets in Argentina, Brazil, and Turkey took the biggest hits and in Asia, the central banks of India, Indonesia and the Philippines have raised rates and intervened to defend their currencies.

However, unlike those countries, which run current account deficits, central banks in external surplus countries and territories such as Thailand, South Korea, and Taiwan and, to a lesser extent, Malaysia won’t feel compelled to keep up with the Fed’s rate hikes.

Asian Currencies

Weaker currencies from portfolio outflows could help lift below-target inflation and give exporters a shot in the arm at a time of heightened uncertainty over global trade and signs that the Chinese economy may be losing steam.

This week's central bank meetings in Thailand and Taiwan are likely to reinforce that outlook, with most economists seeing at most one rate hike in Thailand, Taiwan and South Korea over the next 18 months, compared with the Fed's five or six.

The Philippine peso <php=>lost almost 7 percent from January highs and is now trading at its lowest in 12 years. The Indian rupee <inr=>is near record lows having lost a similar amount, while the Indonesian rupiah <idr=>is down about 5 percent after two rate hikes and heavy central bank buying.

By contrast, the Korean won, the Thai baht <thb=>and the Taiwan dollar <twd=>are all down 3 percent from January levels close to multi-year highs while their central banks kept rates steady near record lows.

Under Less Pressure

One of the reasons why the surplus economies are under less pressure is foreign investor positioning.

In deficit countries, investors tend to own shorter-term bonds, which are more liquid and less risky than longer-term debt. In countries with surpluses, investors are more comfortable holding longer-term securities.

Another reason why those central banks don't have to track the Fed is that China's rise as a major economic power means that Asia is less synchronized with the U.S. cycle than it was before the global financial crisis.

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