ANZ: Asian FX Reserves Are More Than Adequate

ANZ note that "FX reserves across Asia ex-China reached a record high in July. The region's reserves are more than adequate, and appear excessive for some economies, in our view. Over the past four months, we estimate that regional central banks ex-China undertook FX intervention, including through forwards, totalling USD55bn to stem currency appreciation. We believe this is one key reason why Asian currencies have not performed better despite recent weakness in the USD. Therefore, there is room for Asian currencies to appreciate further if central banks ease back substantially in their FX intervention activity."