Asian currencies fell this month, led by India’s rupee’s slide to a record low, as international investors cut holdings of the region’s shares on concern Europe’s debt crisis will hurt exports. Global funds sold about $5.7 billion more of Indian, South Korean and Taiwanese equities than they bought this month, according to exchange data. Philippine gross domestic product grew less than economists predicted last quarter and Thailand’s factory output slumped by the most in more than a decade in October, government reports showed this week. India may say today its economy expanded at the slowest pace since 2009, according to a Bloomberg survey of economists.
The rupee slumped 6.4 percent this month to 52.13 per dollar as of 9:05 a.m. in Mumbai and touched an all-time low of 52.73 on Nov. 22, according to data compiled by Bloomberg. Indonesia’s rupiah weakened 3.6 percent to 9,180 per dollar, according to prices from local banks compiled by Bloomberg. Malaysia’s ringgit lost 3 percent to 3.1680. “Europe is still the biggest concern in the market now,” said Tarsicio Tong, a trader at Union Bank of Taiwan in Taipei. “Unless there’s anything earth-shattering happening in the euro zone, Asian currencies should remain stable toward the end of the year.”
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, dropped 1.6 percent in November to 115.20. South Korea’s won and Taiwan’s dollar led gains in Asian currencies today as euro-area officials agreed to extend the capacity of Europe’s stability fund.
Indonesia’s Intervention
The rupiah is headed for its biggest monthly decline since February 2009. The currency touched a 17-month low in November even after the central bank intervened in the market to limit exchange-rate losses.
Bank Indonesia is committed to stabilizing the rupiah by selling foreign currencies and buying government bonds in the secondary market, Perry Warjiyo, director for economic research and monetary policy at the central bank, said yesterday. The central bank unexpectedly reduced its benchmark interest rate by 50 basis points to 6 percent on Nov. 10.
“On the euro-zone worries, markets have been looking for positive signals,” said Radhika Rao, an economist at Forecast Pte in Singapore. “The Bank Indonesia rate cut was premature. There are constraints to how much the central bank can intervene in the market.”South Korea’s won slid 2.6 percent this month to 1,139.85 per dollar as a government report showed exports rose 8 percent in October from a year earlier in the smallest gain in two years.
Korea’s Output
The nation’s industrial output rose 6.2 percent from a year earlier in October after gaining 6.9 percent the previous month, government data showed today. Finance Minister Bahk Jae Wan said yesterday that sustaining growth will be a policy priority next year as the economy shows signs of slowing.
“Uncertainties in the financial market are making it difficult for investors to bet on a weaker dollar,” said Hong Seok Chan, a currency analyst at Daeshin Securities Co. in Seoul. “We hear positive economy reports occasionally, but they are not enough to relieve concerns regarding Europe’s debt problems.”
Elsewhere, the Thai baht dropped 1.5 percent this month to 31.21 per dollar, Taiwan’s dollar fell 1.3 percent to NT$30.318 and China’s yuan slid 0.2 percent to 6.3692. Onshore financial markets were closed today for a public holiday in the Philippines. The peso lost 2.4 percent in November to close at 43.645 yesterday.