228 Notes to the Consolidated Financial Statements 31 December 2023 45. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued) Interest rate risk The Group’s exposure to the risk of changes in interest rates relates primarily to its interest-bearing bank and other borrowings. The Group does not use financial derivative instruments to manage its interest rate risk. The interest rates and terms of repayments of the borrowings are disclosed in note 25. The following table demonstrates the sensitivity to reasonably possible changes in interest rates, with all other variables held constant, of the Group’s profit before tax (mainly the impact on floating rate borrowings). The Group’s equity is not affected, other than the consequential effect on the accumulated losses of the changes in profit before tax as disclosed below. Increase/(decrease) in basis point (Decrease)/increase in profit before tax US$’000 Year ended 31 December 2023 100/(100) (54,587)/54,587 Year ended 31 December 2022 100/(100) (38,748)/38,748 Foreign currency risk The Group had monetary assets and liabilities, which were denominated in foreign currencies, and were exposed to foreign exchange risk arising from various currency exposures. Foreign exchange risk arises from future commercial transactions, and recognised assets and liabilities, which are denominated in currencies that are not the functional currencies of the relevant entities. The following table details the Group’s sensitivity to a 1% increase and decrease in the relevant foreign currencies against the functional currency (before taking into consideration the financial derivatives). The sensitivity analysis includes only outstanding monetary items denominated in a foreign currency and adjusts their translation at 31 December 2023 for a 1% change in foreign currency rates. 2023 2022 US$’000 US$’000 Increase/(decrease) in profit before tax If US$ weakens against RMB 490 359 If US$ strengthens against RMB (490) (359) If US$ weakens against JPY (7,196) (4,561) If US$ strengthens against JPY 7,196 4,561 If US$ weakens against SGD (5,967) (2,634) If US$ strengthens against SGD 5,967 2,634 If US$ weakens against AUD (2,223) (2,043) If US$ strengthens against AUD 2,223 2,043 If US$ weakens against INR 1,114 1,064 If US$ strengthens against INR (1,114) (1,064) If US$ weakens against HKD (10,646) (4,485) If US$ strengthens against HKD 10,646 4,485 STRENGTH IN UNITY
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