Weakening exchange rates across South-east Asia could hit international student demand, experts have warned, as currencies in the region reach the lowest levels seen in years.
The strength of the US dollar has impacted emerging markets across Asia, such as Indonesia, where the rupiah reached a four-year low earlier this month.
Other countries affected include Malaysia, Thailand and the Philippines – all key target markets for universities looking to diversify international student recruitment. Depending on where students plan to go, currency fluctuations can make international study more expensive.
“It has made studying abroad more challenging for Indonesian students,” said Victor Emanuel, Indonesia country head at AECC, a study abroad consultancy.
“To those students eyeing Western countries, we anticipate a slight decrease in programme commencements and an increase in deferment rates [of 5 to 7 per cent], especially among self-funded students for the remainder intake in 2024.”
It can be difficult to predict the impact of currency fluctuations on student mobility because research shows this is dependent on a range of variables.
“All other things being equal, a weakening currency will depress demand for overseas study, as it makes the cost of going abroad higher,” said Jazreel Goh, Malaysia director at the British Council. “The effect normally plays out over multiple years, as students and parents at different stages in the decision process tend to react differently to changes in the exchange rate.”
In the UK, sterling has strengthened in recent years compared with some South-east Asian markets. According to analysis by the British Council, the pound appreciated by up to 11 per cent in comparison with local currencies in Indonesia, Malaysia and Thailand. Over the same period, the number of UK study visas issued to students in these regions increased 29 per cent in Indonesia, but dropped by 14 per cent and 18 per cent in Malaysia and Thailand respectively.
“Where the local currency weakened more, there was downward pressure on student flows from these countries to the UK,” said Ms Goh. “At the same time, outbound student mobility can still grow in the face of a weakening local currency, in Indonesia, for example, if other factors are favourable.”
Ongoing currency falls could also influence student destinations, according to Haike Manning, executive director for South-east Asia at international education consultancy Acumen. While many South-east Asian currencies are weakening against the dollar and pound, they have remained relatively stable against the Australian and New Zealand dollars.
Resources fo higher education staff on student and staff mobility
“For students ‘on the margins’ in terms of finances, this may lead to increased preference for some destinations over others, rather than deterring from studying abroad,” Mr Manning said.
He added that there was growing interest in transnational education programmes that allow students to start their studies at home and complete them overseas, which can be a more affordable way to gain an international qualification.
However, Mr Manning added, the “long-term fundamentals” for international education in South-east Asia remain strong, “driven by strong economic [and] income growth prospects, demographics and cultural values which prioritise quality education”.
“International providers need to be aware of the market conditions and the increasing competition, including from within the region,” he said. “This just increases the importance of being present and engaged in the region, and ensuring that everything is being done to provide a good ‘customer experience’.”
