A handful of Asia's currencies are holding up amid the carnage hitting their peers

Key Points
  • Amid the carnage in emerging currencies, the Thai baht has stood out for its exceptional performance.
  • While not as strong as the baht, the Malaysia ringgit has been relatively resilient, not sliding as much as the other regional currencies in turmoil.
  • Elsewhere in Asia, the South Korean won, Singapore dollar,and the Taiwanese dollar are also holding out well, according to analysts.
A money exchange bank teller counting Thai baht notes in Bangkok, Thailand.
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Amid the carnage in emerging market currencies over the past two weeks, a few have held up relatively well.

One, the Thai baht, has actually stood out for its exceptional performance.

While not as strong as Thailand's currency, the Malaysian ringgit has been quite resilient, not sliding as much as the other currencies in turmoil. Those two economies have a few things in common: low inflation as well as large current account surpluses, experts pointed out.

Emerging market currencies have been plunging of late, some to new record lows.

Among the worst hit are the Argentine peso, Turkish lira, Indonesian rupiah and , causing fears of emerging markets contagion to spread. The lira, for instance, has lost at least 40 percent of its value against the dollar this year, while the rupee — the worst performing emerging Asian currency — has plunged more than 12 percent.

The Thai baht

The baht has been the best performing Asian currency with a 1.3 percent gain since mid-August, and has held steady through the year.

Thailand has a large current account surplus partly driven by very strong tourism growth, ANZ Head of Asia Research Khoon Goh told CNBC in an email. Typically, a strong surplus supports a country's currency because it means the nation is less dependent on foreign currencies.

"We can credit persistently high trade and current account surpluses, steady GDP growth, low inflation and, more importantly, economic policy certainty for the Thai baht's outperformance in the recent global currency market turmoil," Prakash Sakpal, Asia economist at Dutch bank ING, said in an email to CNBC.

Thailand is a big exporter of autos and other goods, which contributes to its account surplus. Its status as an economic center is also unlikely to be challenged by the ongoing U.S.-China trade war, Goh said on CNBC's "Street Signs" on Wednesday. He explained that the autos sector there is geared toward exporting to the region, and not to the U.S.

Vishnu Varathan, Mizuho Bank's head of economics and strategy, told CNBC that the country is "potentially standing to gain, from trade and supply-chain diversions" with manufacturers possibly relocating their factories there to avoid tariffs.

Additionally, Goh said, Thailand's economic growth is looking stronger and its central bank could soon raise interest rates — which would support the currency further.

The Malaysian Ringgit

Malaysia is a large oil exporter, so higher oil prices have helped the country's current account surplus, analysts told CNBC.

Investors who are looking to escape the struggling Indonesian rupiah may want to consider the ringgit because Malaysia can also offer the same exposure to commodities like palm oil, suggested Varathan. The countries are the world's two largest palm oil producers and exporters.

While the ringgit has not escaped the emerging markets rout fully, Malaysia's exports were strong in July at 9.4 percent growth against the prior year-ago period, said Sakpal. Imports growth, meanwhile, slowed to 10.3 percent year on year, according to Sakpal, so that has resulted in a wider trade surplus.

The ringgit has slid only 1.44 percent against the dollar, year to date.

"We expect the (Malaysian ringgit) to reacquire its status as an Asian outperformer once the ongoing uncertainty from the U.S.-China trade war and the U.S. dollar strength lifts," he said.

Other currencies

Elsewhere in Asia, the South Korean won, Singapore dollar,and the Taiwanese dollar are also holding out well, according to analysts.

Both the won and Taiwanese dollar have been resilient because of their countries' large current account and trade surpluses, as well as low inflation rates.

"The north Asian currencies also seem to be cushioned by the stability of Chinese yuan since the People's Bank's tweaking of the currency policy last month, which in general is a positive for most Asian currencies given China's dominance in the region," Sakpal added.

Beijing had reintroduced measures to stabilize its managed currency. Those appeared to be aimed at defending the currency from sudden weakening on market speculation.

The Singapore dollar, while it has also weakened, is also doing better than many peers, said Goh, who pointed to the island nation's monetary policy.

— CNBC's Sri Jegarajah contributed to this report.