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flag Asian central banks use dollar forwards to shield currencies from a strong US dollar, but risks loom.

flag Central banks in Asia are using dollar forwards to protect their currencies from a strong US dollar, but this strategy may pose risks. flag These financial instruments allow central banks to potentially lower costs and avoid depleting their reserves, but they could also lead to increased capital outflows and pressure local currencies, affecting exchange rates and inflation. flag Asian central banks are monitoring this activity closely and considering measures to mitigate potential risks.

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