The medicine is not working! High oil prices are choking the economy. Asian central banks' aggressive rate hikes are unable to prevent the depreciation of their currencies.

Central banks in various Asian countries are taking increasingly aggressive interest rate hikes to support their local currencies, but there is currently little noticeable effect. After the unexpected 100 basis point rate hike by the Central Bank of Sri Lanka on May 22, the Sri Lankan rupee temporarily rose more than 1% this week, but has since given back all gains and fell by about 0.5% by Friday. Similarly, after the unexpected 50 basis point rate hike by the Indonesian central bank last week, the Indonesian rupiah briefly strengthened, but then fell again and hit a historical low. The Pakistani rupee has remained relatively stable after the 100 basis point rate hike by the Pakistani central bank in April. Eugenia Victorino, Asia strategist at Nordic Danske Bank in Singapore, said, "Central banks have limited ability to support exchange rates. The real problem lies in Asia's high dependence on imported oil. Global energy supply and prices are not within the control of central banks, so they are facing difficulties." Central banks in Asian countries are currently at the forefront of global interest rate hikes, and the policy decision by the Reserve Bank of India next week will be a market focus. Despite the Indian rupee hitting record lows this month, the Reserve Bank of India is expected to maintain interest rates unchanged. Philippine central bank governor Eli Remolona stated last week that officials are considering raising interest rates ahead of the next policy meeting on June 18. The Philippine peso has also fallen to historic lows this month. Policymakers in developed countries have also signaled aggressive interest rate hikes. Karen Silk, Assistant Governor of the Reserve Bank of New Zealand, stated on Friday that all options, including a 50 basis point rate hike, will be considered at the next meeting in July. Kenneth Goh, head of private wealth management at Great Eastern in Singapore, said, "Interest rate hikes cannot solve the problem of oil import bills." He pointed out that the real rebound of the Philippine peso, Indonesian rupiah, and Indian rupee will ultimately depend on a decrease in oil prices, rather than interest rate hikes. Currently, the global energy transport chokepoint of the Strait of Hormuz remains disrupted due to the abnormal navigation in the Middle East. The global energy prices are still relatively high. The Iranian Islamic Revolutionary Guard Navy stated on May 28 that a total of 26 merchant ships and oil tankers were coordinated by Iran to pass through the Strait of Hormuz in the past 24 hours, and Iran is imposing "comprehensive and vigorous" control over the strait. At the same time, according to U.S. officials, after multiple rounds of indirect negotiations, U.S. and Iranian negotiation representatives have reached a preliminary agreement on a 60-day memorandum of understanding. This agreement aims to extend the current fragile ceasefire and pave the way for substantive negotiations on the Iranian nuclear issue. The core content of the provisional agreement includes: ensuring unrestricted navigation in the Strait of Hormuz, Iran committing to clear all mines in the key waterway within 30 days, and not charging tolls or harassing passing ships. In exchange, the U.S. will gradually lift the maritime blockade on Iranian ports and agree to temporarily suspend some sanctions during the 60-day negotiation period to allow Iran to resume unrestricted oil exports. Regarding the nuclear issue, Iran will make a formal commitment not to seek, develop, or purchase nuclear weapons. Once the memorandum of understanding is signed, both sides will immediately start negotiations on the final agreement, with a focus on how to handle Iran's existing stockpile of about 440 kilograms of highly enriched uranium and future restrictions on uranium enrichment activities. Although there has been significant progress in the negotiations, the effectiveness of the agreement ultimately depends on the approval of the highest leaders in the U.S. and Iran. According to a U.S. official, President Trump has requested a few days to consider the mediators proposal and has not yet given final approval. Meanwhile, Iranian Supreme Leader Ayatollah Khamenei has also not confirmed the terms by signing. U.S. officials are cautiously optimistic about the prospects, pointing out that this is at least a starting point to get everyone to the negotiating table. An official said, "If it becomes clear during the 60-day negotiations that Iran cannot fulfill its promises on the nuclear issue, President Trump will retain all options, whether economic or military." It is worth noting that diplomatic efforts are progressing alongside fragile military realities. Just hours before this news emerged, U.S. Central Command confirmed intercepting a ballistic missile launched by Iran towards Kuwait, and the U.S. military had launched a new round of strikes on military targets inside Iran. Analysts warn that because Iran sees a ceasefire on all battlefronts in the Middle East as a necessary condition for signing the agreement, the regional situation, particularly in southern Lebanon, remains highly tense.