FORWARD TOGETHER Notes to the Consolidated Financial Statements 31 December 2022 226 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 derivative financial 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$’000 Year ended 31 December 2022 100/(100) (38,748)/38,748 Year ended 31 December 2021 100/(100) (19,819)/19,819 Foreign currency risk The Group had monetary assets and liabilities, which were denominated in foreign currencies, and were exposed to foreign exchange risk arising from various currency exposures. Foreign exchange risk arises from future commercial transactions, and recognised assets and liabilities, which are denominated in currencies that are not the functional currencies of the relevant entities. The following table details the Group’s sensitivity to a 1% increase and decrease in the relevant foreign currencies against the functional currency. The sensitivity analysis includes only outstanding monetary items denominated in a foreign currency and adjusts their translation at 31 December 2022 for a 1% change in foreign currency rates. 2022 2021 US$’000 US$’000 Increase/(decrease) in profit before tax If US$ weakens against RMB 359 169 If US$ strengthens against RMB (359) (169) If US$ weakens against JPY (4,561) (1,309) If US$ strengthens against JPY 4,561 1,309 If US$ weakens against S$ (2,634) (2,710) If US$ strengthens against S$ 2,634 2,710 If US$ weakens against A$ (2,043) (402) If US$ strengthens against A$ 2,043 402 If US$ weakens against INR 1,064 1,041 If US$ strengthens against INR (1,064) (1,041)
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