Regulators move to limit derivatives-supported debt in Asia

Back to basis

After an extended period of volatility during the global financial crisis, when the evaporation of US dollar liquidity drove the Asian foreign exchange basis into positive territory, the subsequent deluge of dollars into the region during the past two years has reversed the trend, sending the basis swap into negative territory in most cases and limiting volatility.

“The premium associated with dollar scarcity has significantly reduced as a result of global policy measures and the flow of private