Covid-19 exposes Asian banks' vulnerability to US dollar funding: ADB

US dollar-denominated lending has increased across banks in high-income Asian economies, notes ADB briefing paper

The Covid-19 pandemic has unravelled global financial markets, putting Asia's financial resilience to the test, the Asian Development Bank (ADB) said on Tuesday.

As economic losses associated with the pandemic are set to rise, Asian stocks have plunged and short-term portfolio flows reversed sharply in March, putting local currencies under severe pressure.

Amid flight to safety, global demand for the United States (US) dollar soared, risking the tightening of local financial conditions in emerging Asian economies which remain heavily exposed to US dollar funding risks.

"While multiple factors are behind the surge in demand, it is a global rush to