Biggest currency rout since 1997 puts Asia central banks in bind

A customer places Japanese 1,000 yen banknotes on a checkout counter while making a purchase at an Akidai YK supermarket in Tokyo, Japan, on Monday. (Bloomberg photo)

The surge in the dollar has set Asian currencies on course for their worst quarter since 1997 and created a dilemma for central bankers.

 Policy makers already grappling with the fastest inflation in decades now face stark choices: forcefully raise borrowing costs to defend currencies and risk hurting growth, spend reserves that took years to build to intervene in foreign exchange markets, or simply step away and let the market run its course.