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Asian currencies slump as risk aversion returns

Asian currencies slumped on Friday, with Indonesia's rupiah tumbling to a four-month low as fund managers shunned emerging-market debt and equity markets.

The Malaysian ringgit slipped to the lowest this month, the South Korean won had the first weekly drop in seven and the Philippine peso suffered the worst week since 2000. Stocks slumped across the region after new US home sales fell more than economists predicted and companies scrapped debt sales because of waning demand for riskier investments.

"There's risk aversion creeping back into the markets over worries in the US and that's going to hurt Asian currencies," said David Mann, a currency strategist at Standard Chartered Bank in Hong Kong. "The focus is that US stocks are down and there's weaker US data."

The rupiah declined as much as 1.2 percent to 9,253, the lowest since March 6, and traded at 9,225 against the US dollar as of 3pm yesterday in Jakarta. The ringgit slipped 0.6 percent to 3.4595, taking losses on the week to 1.5 percent. The won lost 0.7 percent this week to 921.70.

The New Taiwan dollar slipped 0.1 percent to NT$32.861 against the US dollar, Taipei Forex Inc said. The currency completed its second weekly decline.

The Taiwanese currency has lost 0.6 percent this year, the second worst performing currency among the 10 most active in Asia, data compiled by Bloomberg show. Only the Indonesian rupiah has fallen more.

The Philippine peso dropped as Economic Planning Secretary Romulo Neri said the economy was suffering from a rising currency. The peso has gained 7.1 percent this year, buoyed by remittances and overseas funds buying stocks.

The peso fell 0.9 percent to 45.725 against the US dollar, taking its loss this week to 2 percent, the most since Oct. 27, 2000.

Elsewhere, the Vietnam dong was little changed at 16,143 per US dollar and the Singapore dollar was steady at S$1.5127.
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