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NT dollar leads fall in Asian currencies

The New Taiwan dollar fell the most in 21 months on Friday, paring a weekly gain, on speculation the central bank sold the currency to temper its rally to the highest level in more than a decade.

The Taiwanese currency slipped a second day after it strengthened beyond NT$30 this week for the first time since October 1997. The central bank entered the market twice on Thursday, a report from Credit Suisse Group said.

Korea's won fell on Friday after the central bank said the nation posted a current-account deficit for a third month.

"The central bank doesn't want the Taiwan dollar to surge over the short term, as its recent big appreciation has been putting a lot of pressure on exporters," said Henry Lin, a currency trader at Shin Kong Commercial Bank (新光銀行) in Taipei.

The NT dollar fell 0.7 percent to NT$30.402 versus the US currency in Taipei on Friday, Taipei Forex Inc said. The decline was the biggest since June 8, 2006.

The currency still gained 0.5 percent this week, the best performer of the 10 most-active currencies in Asia outside Japan, as investors accelerated purchases of local stocks after president-elect Ma Ying-jeou (馬英九) won the election last Saturday on a pledge to enhance economic ties with China.

Fund managers based abroad bought more Taiwanese shares than they sold this week after being net sellers last week, stock exchange data showed. Buying exceeded sales by the most since December 2005 on Monday.

South Korea's won fell for a third day on Friday, extending this month's slump to 6.1 percent on the worsening current-account position. The current-account deficit was US$2.35 billion last month compared with a revised US$2.75 billion in January, the Bank of Korea said on Friday in Seoul.

"The current-account deficit is a negative for the won," said Kim Sung Soon, a dealer at Industrial Bank of Korea in Seoul. Concern foreign-exchange authorities will intervene in the currency market is also "keeping investors on their toes."

The won lost 0.5 percent to 993 per US dollar, Seoul Money Brokerage Services Ltd said.

The currency extended its decline after the Yonhap news agency said North Korea test fired short-range missiles.

Thailand's baht completed its biggest weekly loss in three against the US dollar on speculation overseas companies were repatriating earnings and dividends for book keeping.

The baht also slumped for a fifth week against the yen before the month and quarter-end, and Japan's financial-year close tomorrow. Finance Minister Surapong Suebwonglee said this week he was "satisfied" with the baht's movement since the government removed some capital controls this month.

"There is some demand against the baht from some companies, especially the Japanese, ahead of the fiscal year-end," said Chatchawan Jumruswittayawong, a foreign-exchange trader at Bank of Ayudhya Pcl in Bangkok.

The baht declined to 31.42 per US dollar from 31.27 a week ago, data compiled by Bloomberg show.

The Malaysian ringgit fell for a second week after the central bank said growth in Southeast Asia's third-largest economy will slow this year for the first time since 2005.

"Malaysia is not immune to a global slowdown and the political development has clouded the ringgit's prospects," said Enrico Tanuwidjaja, an economist at Oversea-Chinese Banking Corp in Singapore. "Funds may be seeking a safer place."

The ringgit slipped 0.5 percent to 3.1955 per US dollar from 3.1795 last Friday, Bloomberg data show. The currency also declined 1.1 percent against the Singapore dollar this week, the most since July.

Elsewhere, the Philippine peso fell 0.3 percent for the week to 41.825 per US dollar and the Indonesia rupiah declined to 9,205 from 9,065 a week earlier.
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