Have a look at a list of the worst-performing currencies since the start of the U.S. and Israeli war with Iran and a striking but unsurprising pattern emerges: They’re almost all energy importers.
The biggest losers include the Egyptian pound, the Philippine peso, the South Korean won and the Thai baht. Among the handful of currencies that have risen, meanwhile, you find the Brazilian real, the Kazakhstani tenge and the Nigerian naira — all significant oil exporters.
That’s a hint of how the next stage of this energy crisis may play out. Just as major oil importers have been running down their reserves of crude since the Strait of Hormuz was closed, so they’ve also been eroding their financial buffers. Governments have cut taxes and lifted subsidies for road fuels to dampen the bill shock from rising crude prices. Foreign exchange reserves, too, are declining rapidly as the price of oil and gas imports goes up without any offsetting increase in the value of exports.
