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BNY says $95 oil would not trigger a broad Asia balance-of-payments crisis

BNY links the risk to currency weakness from tighter dollar liquidity, while citing stronger current-account buffers in ASEAN and India as support.

Reported · Written up by our desk · EM Currencies

FXStreet, citing BNY strategist Geoff Yu, said oil around $95 would be an FX shock for Asian energy importers, but it is unlikely to spark a broad balance-of-payments crisis across the region.

Yu pointed to stronger current-account buffers in ASEAN and India, along with prior fiscal consolidation and lighter FX positioning, as factors that should help limit destabilizing pressure.

The commentary also warned that higher crude prices could worsen currency weakness where capital outflows were already present, and that a lack of dollar liquidity would make the impact more severe.

BNY added that official data showed ASEAN and India running the highest current-account surpluses in a decade ahead of the conflict, and said reserve drain during March, while severe, was manageable, urging continued monitoring of central bank intervention and reserve data.

Latest closeWTI crude $87.52 ▲3.1%

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