Asian currencies dropped for a second week on speculation Europe’s worsening debt crisis would weaken exports and prompt regional policymakers to cut borrowing costs.
Global investors sold US$1.6 billion more Taiwanese, South Korean and Thai stocks than they bought this week, exchange data showed. Asian currencies gained on Friday after better than expected US jobs data spurred a rebound in stocks and commodities.
“The market is seeing some rebound, but this is not to say that stability is here to stay,” said Suresh Kumar Ramanathan, a currency strategist at CIMB Investment Bank BHD in Kuala Lumpur. “With growth slowing, policymakers in Asia are beginning to lean toward policy easing from China to Singapore.”
The New Taiwan dollar dropped 0.5 percent this week to NT$30.188 against its US counterpart, while India’s rupee lost 2 percent to 50.1150 per US dollar in Mumbai. South Korea’s won slid 1.4 percent to 1,126.61, Malaysia’s ringgit declined 1.1 percent to 3.1488 and the Philippine peso dropped 0.9 percent to 43.28.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-traded currencies excluding the yen, lost 0.6 percent this week.
“The concern has clearly shifted to growth, which means the outlook on interest-rate differentials with the US is narrowing and that’s why currencies in the region are weak,” said Marcelo Ayes, senior vice president at Rizal Commercial Banking Corp in Manila.
Bank Indonesia cut its reference rate by 50 basis points to 6 percent on Thursday. The Bank of Korea kept its seven-day repurchase rate at 3.25 percent for a fifth month yesterday. Bank Negara Malaysia left its overnight rate at 3 percent on Friday.
China’s yuan dropped 0.05 percent this week to 6.3424 per US dollar, snapping a two-week advance. Exports increased 15.9 percent last month from a year earlier, less than the 16.1 percent economists surveyed by Bloomberg forecast, data showed on Thursday.
The currency was little changed on Friday as Hong Lei (洪磊), a Chinese foreign ministry spokesman, said at a briefing in Beijing that policymakers would proceed with exchange-rate reform. US Secretary of the Treasury Timothy Geithner said on Thursday that China has acknowledged the importance of faster adjustments in the yuan.
Elsewhere, Thailand’s baht weakened 0.6 percent to 30.84 and Indonesia’s rupiah fell 0.2 percent to 8,967.
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