Amidst Currency Volatility, Hedging Matters Now More Than Ever, Especially for Growing Businesses

Recently, the New Taiwan Dollar (TWD) recorded its sharpest rise against the U.S. Dollar (USD) since the 1980s – nearly 10% in just two days. While that’s extreme, it’s part of a broader pattern: currency volatility is back, especially across Asia’s emerging markets.

For growing businesses involved in cross-border trade, even small fluctuations in exchange rates can translate into big shifts in cost, profit, and cash flow.

Many ASEAN currencies, from the Indonesian Rupiah to the Thai Baht, have seen significant swings in recent months, posing real financial risks for importers, exporters, and businesses managing multi-currency expenses.

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Currency Volatility Across ASEAN Markets

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Indonesia – Indonesian Rupiah (IDR)

IDR touched 16,957 in March before strengthening to 16,400 in April — a sharp swing in just a few weeks.

Thailand – Thai Baht (THB)

One of the most volatile pairs this year, USD/THB moved nearly 7% within three weeks.

Malaysia – Malaysian Ringgit (MYR)

MYR has steadily strengthened since the start of the year, driven by commodity trends and capital flows.

Philippines – Philippine Peso (PHP)

PHP has shown a consistent downtrend from earlier highs in 2025.

Singapore – Singapore Dollar (SGD)

The SGD’s trajectory suggests a move toward safe-haven assets amid global uncertainty.

While these numbers may seem small at first glance, even a 1% shift can eat into profit margins. For example:

An Indonesian SMB with a USD 1 million payment due in August 2025 would need to pay an extra 700 million IDR if the exchange rate moved from 16,400 to 17,100. That’s enough to impact operating budgets, pricing strategies, and bottom-line profitability.

Why Forward Contracts Matter

For growing businesses, staying profitable is often about predictability and control — two things that currency volatility threatens. Forward contracts offer a simple yet powerful solution:

• Rate Certainty: Lock in rates today for future payments or receivables.
• Budget Clarity: Know exactly how much your overseas invoice or payout will cost.
• Less Stress: Spend less time watching the markets and more time running your business.

With a forward contract, you can fix an exchange rate for up to a year ahead — whether it’s to pay a supplier in China, receive payments from a client in the U.S., or cover payroll for a regional office.

What Growing Businesses Can Do Now

• Assess your exposure: Which currencies are you earning or spending in?
• Run scenarios: What happens if rates move 5% against you?
• Get support: Work with a partner like Wallex to build a forward strategy that fits your cash flow.

Final Thoughts

Volatility will always be part of the global market. But for growing businesses operating across borders, hoping the rates go your way isn’t a strategy. A proactive hedging plan with forward contracts can help you protect your margins, stay on budget, and make better financial decisions.

Need help managing your currency exposure? We’re help to help – let’s talk.