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14 January 2026

Asia FX Talking: China delivers controlled CNY appreciation

The renminbi starts the year on a strong footing as expectations build for China's huge trade surplus to finally make it back into the domestic currency. We look for a gentle decline towards the 6.85 area this year. Korean authorities are struggling to turn won sentiment around, while South Asian currencies also remain fragile

Authors

Lynn Song

Min Joo Kang

Deepali Bhargava

Main ING Asia FX Forecasts

	USD/CNY		USD/KRW		USD/INR
1M	6.97	↑	1450	↓	90.00	↓
3M	6.95	↑	1425	↓	88.75	↓
6M	6.95	↑	1400	↓	88.50	↓
12M	6.90	↑	1400	↓	88.50	↓

USD/CNY: Market upbeat on CNY appreciation prospects to start the year

Spot	One month bias	1M	3M	6M	12M
USD/CNY 6.97	Neutral	6.97	6.95	6.95	6.90

The Chinese yuan strengthened by more than usual over the past month, with December 2025 seeing the largest monthly appreciation for the CNY against the USD since August 2024. USD/CNY has been in a 6.98-7.07 range over the past month.
The People’s Bank of China’s fixings have now moved from supporting a stronger CNY towards pushing back against the pace of appreciation. US-China yield spreads have narrowed after the Fed rate cut, and with the Fed set to ease faster than the PBoC, this trend should continue, albeit likely at a slower pace.
With a faster pace of appreciation in December, we accelerate our timeline for appreciation, and adjust our 2026 fluctuation band forecast to 6.85-7.25. Risks still look balanced towards CNY appreciation as yield spreads narrow further, and as the current account surplus balloons.

USD/KRW: The KRW to be range-bound around 1450

Spot	One month bias	1M	3M	6M	12M
1457.00	Neutral	1450.00	1425.00	1400.00	1400.00

Thanks to various FX stabilisation measures by the authorities, USD/KRW levelled down from near 1,500 to 1,430 by the year end. Yet, underlying strong USD demand persists and USD/KRW has climbed back to around 1,470.
The Bank of Korea is likely to keep its policy rate at 2.5% in January due to inflation risks from a weak Korean won and the continued rise in Seoul housing prices.
Robust global chip demand may attract more foreign capital to the local equity market but heightened geopolitical risk is expected to keep the USD/KRW around 1,450 in near term.

USD/IDR: Fiscal concerns could keep rupiah under pressure

Spot	One month bias	1M	3M	6M	12M
USD/IDR 16830.00	Neutral	16800.00	16900.00	17000.00	17000.00

A combination of weaker trade performance, widening rate differentials, and fiscal concerns drove the Indonesian rupiah lower against the US dollar in 2025, in line with our expectations. IDR ended the year as the region’s second-worst performer, depreciating 3.5%. vs the USD.
Persistent worries over fiscal sustainability and lack of policy clarity weighed further on sentiment in 4Q. Foreign investor outflows from government bonds accelerated, totalling USD $1.7bn, as concerns over a rising fiscal deficit deepened - pushing foreign holdings of Indonesian bonds to decade lows.
Looking ahead, subdued GDP growth and sluggish government revenues will continue to pressure the currency. We are adding further weakness to our already weak-IDR profile, given investor unease which is likely to keep FII inflows muted.

USD/INR: Sharp fall in REER should limit further downside

Spot	One month bias	1M	3M	6M	12M
USD/INR 90.13	Neutral	90.00	88.75	88.50	88.50

The Indian rupee ended last year as Asia’s weakest currency, pressured by a widening trade deficit which was driven by elevated tariffs and increased gold imports. Portfolio outflows from equities accelerated in December amid muted earnings and stretched valuations.
Overall, the central bank’s assessment of the growth-inflation trade-off aligns with ours, suggesting scope for further policy easing. However, INR weakness has eroded currency-adjusted returns for bond investors, prompting foreign institutional investor outflows from debt markets too.
We expect India to eventually secure lower tariff rates, which should help narrow the trade deficit and support the rupee over the next three to six months. From a valuation standpoint, the sharp decline in INR’s real effective exchange rate should also limit further downside.

USD/PHP: Fresh concerns on growth hit the local currency

Spot	One month bias	1M	3M	6M	12M
USD/PHP 59.27	Mildly Bearish	59.00	59.00	59.50	59.50

Concerns over softer GDP growth have weighed on the Philippine peso. Recent data highlights the risk that weak government spending could remain a persistent drag, dampening private sector confidence. We forecast GDP growth at 5.4% in 2026, with risks skewed to the downside.
We expect the Bangko Sentral ng Pilipinas to deliver further easing in 1Q 2026 as growth underperforms. External imbalances add pressure, with the balance of payments swinging sharply into deficit in 2025 through October, compared to a small surplus in 2024.
Despite recent peso weakness, the BSP governor noted limited pass-through to domestic inflation. On balance, we expect the BSP to maintain a less defensive stance, keeping PHP biased to the downside over the medium term.

USD/SGD: Likely to remain range-bound

Spot	One month bias	1M	3M	6M	12M
USD/SGD 1.29	Neutral	1.29	1.29	1.28	1.28

Singapore delivered the biggest upside surprise in 2025, posting 4.8% GDP growth versus the sub-2% consensus at the start of the year, supported by a diversified export base and robust trade performance. A lower 10% base tariff continues to boost electronics and precision engineering, creating positive spillovers for the domestic economy and reinforcing growth momentum.
This strength in the economy together with robust foreign inflows have supported the Singapore dollar. The SGD nominal effective exchange rate recently rose to a peak of c.1.5-1.8% above the midpoint of its policy band, suggesting further upside to NEER is limited.
We think there's still room for the Monetary Authority of Singapore to ease, especially with consumer price inflation remaining modest within the 0.5-1.5% target range for 2026 – yet any further policy adjustment will likely require clearer signs of economic weakness. Overall, we expect the pair to be range-bound in the near term.

USD/TWD: TWD stabilises after months of gradual depreciation

Spot	One month bias	1M	3M	6M	12M
USD/TWD 31.60	Mildly Bearish	31.50	31.30	31.00	30.50

The Taiwan dollar halted a five-month trend of gradual depreciation in December, when USD/TWD stabilised at around 31.4. The range of fluctuation was quite small, between 31.1-31.5.
As expected, the Central Bank of the Republic of China decided to keep the policy rate unchanged in December. The US-Taiwan yield spread slightly narrowed over the past month. Equity market net inflows were more or less neutral over the past month, perhaps contributing to the steady TWD.
It is possible that the end of the gradual depreciation trend may have been tied to an agreement between the CBC and US Treasury to “refrain from manipulating exchange rates.” Absent such intervention, local factors could still slightly favour an uptick in the TWD over the coming months.

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Authors

Lynn Song

Chief Economist, Greater China

Min Joo Kang

Senior Economist, South Korea and Japan

Deepali Bhargava

Regional Head of Research, Asia-Pacific