Sun, Aug 26, 2007 - Page 10 News List

Asian currencies gain as foreign funds buy assets

BLOOMBERG

Asian currencies gained this week, led by the Singapore dollar, on speculation the region will keep attracting overseas investors to local stock markets.

Global funds bought more shares than they sold this week in Indonesia and Thailand and Philippine central bank Governor Amando Tetangco said a US Federal Reserve discount rate cut last week will provide relief to emerging markets.

South Korean Finance Minister Lim Young-rok said economic expansion is unlikely to falter amid US mortgage losses on Thursday.

The New Taiwan dollar fell 0.1 percent to NT$32.98 against the US dollar on Friday, Taipei Forex Inc said. The Taiwanese currency declined 0.2 percent this week.

The Singapore dollar rose 0.9 percent in the past five days to S$1.5241, the best weekly gain since May last year. Consumer prices climbed in July at the fastest pace in more than a decade, a report showed two days ago, suggesting the central bank will maintain a policy to strengthen the currency to curb inflation.

The Morgan Stanley Capital International Asia-Pacific Index of regional shares gained 8 percent this week, after a four-week slump.

All Asian currencies climbed against the yen as Japan, Asia's biggest economy, kept interest rates at 0.5 percent.

The Philippine central bank on Thursday kept its benchmark interest rate among the highest in Asia at 6 percent.

Tetangco said the strong peso, up 0.3 percent this week and almost 5 percent this year, is damping inflation by lowering the cost of imports. The peso closed at 46.710.

Elsewhere, the Indonesian rupiah gained 0.6 percent this week to 9,413 per US dollar and the Thai baht rose 0.6 percent onshore to 34.38 per dollar.

The yuan rose the most in more than six weeks as a central bank official said capital inflows pose a risk to the economy, spurring speculation the government will allow faster currency gains to cool growth.

The currency also gained as the CSI 300 Index of shares advanced to a record for a fifth day.

The yuan advanced 0.27 percent to 7.5666 against the US dollar as of 5:30pm in Shanghai, bringing its advance for the week to 0.38 percent.

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