In the world of international finance, currency stability is a highly sought-after attribute. Stable currencies are a sign of economic strength and are preferred by investors and traders for their reliability. In Asia, several currencies have established themselves as pillars of stability, characterised by low volatility and a good reputation for maintaining their value.

This FXOpen article discusses seven of the most stable currencies in Asia. In contrast to regular fluctuations in the exchange rates of many assets in the forex market, these currencies have shown remarkable stability.

The Most Stable Currencies of Asian Countries

During market turmoil, traders face increased volatility and liquidity issues. They search for safe assets like Asian currencies, such as the Singapore dollar (SGD) and Japanese yen (JPY). They are characterised by low volatility and can be a great choice for diversification even in a stable foreign exchange market.

Many Asian currencies can increase portfolio stability and reduce risk, which makes them valuable for traders who want to secure their investments. Since the US dollar is the world’s most stable currency, and it serves as a benchmark for currency assessment, below, we will compare each Asian currency to USD.

*The rates are effective on the 26th of October, 2023.

1. Singapore Dollar (SGD)

Exchange rate: 1 SAR = 0.730 USD

The Singapore dollar, denoted as SGD, is known for its stability and low volatility. The robust financial infrastructure and prudent monetary policies of Singapore contribute to the consistent strength of its currency.

The Monetary Authority of Singapore (MAS) implements a managed floating exchange rate system, allowing the SGD to adjust gradually in response to economic changes. This controlled approach to exchange rate management has led to the SGD’s reputation as a reliable and stable currency in Asia.

2. South Korean Won (KRW)

Exchange rate: 1 SAR = 0.0007 USD

The South Korean won ranks as the second most stable currency in Asia. South Korea’s strong export-oriented economy plays a crucial role in maintaining the stability of the KRW.

The well-regulated financial sector in South Korea also supports the KRW. The sound monetary policies and intervention in the foreign exchange market of the Bank of Korea have contributed to the currency’s resilience, making it a preferred choice for traders.

3. Thai Baht (THB)

Exchange rate: 1 THB = 0.027 USD

The Thai baht is a stable currency in Asia that has been gaining popularity among traders. Thailand’s economic fundamentals, including a healthy tourism industry and robust exports, have reinforced the consistent performance of the THB.

The developing economy and growing middle class make it an attractive place to do business. The Bank of Thailand manages the THB and has a strong policy that helps maintain a stable exchange rate.

4. Japanese Yen (JPY)

Exchange rate: 1 JPY = 0.0066 USD

The Japanese yen is one of the world’s most stable currencies, and it is widely accepted in international trade and investment.

The currency is backed by a strong economy — Japan’s status as a major economic player and its substantial foreign exchange reserves ensure the reliability of the yen. The Bank of Japan carefully manages the JPY and has a policy of maintaining a stable exchange rate. Its currency interventions also allow the yen to remain the world’s safe-haven asset.

5. Malaysian Ringgit (MYR)

Exchange rate: 1 MYR = 0.208 USD

The Malaysian ringgit is the currency of Malaysia, and it is accepted in border areas of Indonesia, the Philippines, and Vietnam. The MYR has shown remarkable resilience in the face of global economic fluctuations.

Malaysia’s diversified economy, coupled with its balanced fiscal and monetary policies, have contributed to the MYR’s stability. The central bank, Bank Negara Malaysia, actively manages exchange rates to prevent excessive volatility, making the ringgit a reliable asset for traders.

6. Chinese Yuan (CNY)

Exchange rate: 1 CNY = 0.136 USD

The Chinese yuan (renminbi) is a stable currency that is rapidly gaining popularity among traders and investors. The Chinese government has taken measures to ensure the stability of CNY. The yuan’s rate is pegged to the US dollar at a daily reference rate set by the People’s Bank of China (PBOC) but is allowed to fluctuate within 1-2 per cent.

The State Administration of Foreign Exchange has emphasised that foreign exchange expectations are stable, which helps to keep the CNY exchange rate at reasonable levels.

7. Hong Kong Dollar (HKD)

Exchange rate: 1 HKD = 0.127 USD

The Hong Kong dollar is known for its firm peg to the United States dollar (USD), which provides stability and predictability for traders. Hong Kong’s robust financial sector and well-considered monetary policies have helped maintain the stability of this currency.

The Hong Kong Monetary Authority (HKMA) actively manages the currency’s exchange rate. The HKMA has deployed significant resources to defend the peg, including buying HKD and reducing liquidity in the banking system.

Final Thoughts

The stable Asian currencies mentioned in this article provide traders with attractive options for diversification and also offer low volatility and potential for growth. In Asia, exchange rates have been stable due to the prudent monetary policies implemented by various central banks in the region.

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