Asian currencies fell for a fourth week, the longest stretch of losses this year, on speculation Europe’s debt crisis would stall the global economic recovery and hurt demand for the region’s exports.
Official reports this week showed China’s manufacturing probably contracted for a seventh month this month, Taiwan’s overseas shipments and factory output declined, and Malaysia grew at the slowest pace last quarter since June.
India’s rupee reached a record low even after the central bank took measures to boost US dollar supply to alleviate pressure on the currency.
“You still have massive problems in Europe and there are a lot of concerns about the slowdown in China,” said Thomas Harr, the Singapore-based head of Asian foreign-exchange strategy at Standard Chartered PLC. “There’s pressure on all Asian currencies at the moment.”
India’s rupee slid 1.7 percent this week to 55.3750 per US dollar in Mumbai, according to data compiled by Bloomberg. The Philippine peso weakened 1.2 percent to 43.755, Thailand’s baht lost 1.1 percent to 31.69, China’s yuan slipped 0.2 percent to 6.3439 and the New Taiwan dollar edged down 0.1 percent to NT$29.650.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-traded currencies excluding the yen, dropped 0.5 percent this week and touched 114.21 on Friday, the lowest level since Dec. 15. Funds based abroad pulled US$1.9 billion from equity markets in Taiwan, South Korea, Indonesia and Thailand this week, exchange data show.
China’s biggest lenders may miss their loan targets for the first time in at least seven years as the slowdown crimps credit, according to three bank officials with knowledge of the matter, who declined to be identified because they are not permitted to speak publicly.
Banks’ total new loans for this year will be about 7 trillion yuan (US$1.1 trillion), less than the government goal of 8 trillion yuan to 8.5 trillion yuan, one of the officials said.
Greece is heading for a second election on June 17 after an inconclusive vote this month ignited concern it may quit the euro.
“The downside risks to China’s growth are greater now as European leaders can’t make progress on solving their debt problems,” said Stella Lee, president of Success Futures & Foreign Exchange Ltd in Hong Kong. “The weak loan growth and the uncertainty in Europe are going to put yuan appreciation to a halt.”
The rupee fell to a record low of 56.3875 per US dollar on Thursday, prompting central bank Governor Duvvuri Subbarao to say policymakers would take the required steps to curb swings in the exchange rate.
Elsewhere, South Korea’s won fell 1.1 percent this week to 1,185.43 per US dollar. Malaysia’s ringgit dropped 0.6 percent to 3.1535 and earlier touched 3.1736, the lowest since Jan. 3, while Indonesia’s rupiah declined 1.3 percent to 9,474.