Asian currencies fell this week as a deepening global economic slowdown curbed risk-taking and hurt demand for the region’s assets.
The New Taiwan dollar had the biggest drop in eight weeks, and Indonesia’s rupiah declined for a third week. Data released on Thursday showed South Korea’s second-quarter economic growth was the slowest in almost three years, and the Bank of Thailand cut its growth target for this year to 5.7 percent from 6 percent.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s currencies, pared losses after European Central Bank President Mario Draghi pledged to preserve the euro.
“Risk-taking appetite has been low this week,” Albert Lee, a Taipei-based fixed-income trader at Cathay United Bank (國泰世華銀行), said on Friday. “Economic slowdown is happening in many countries, and although there are some hopes for Europe, you never know if Draghi’s comments will turn into concrete actions.”
The NT dollar weakened 0.4 percent to NT$30.10. The rupiah slid 0.2 percent this week to 9,472 per US dollar, according to prices from local banks compiled by Bloomberg. Malaysia’s ringgit slipped 0.1 percent to 3.1548. India’s rupee was little changed at 55.53.
Global funds sold US$1.2 billion more Taiwanese, Indian, Philippine and Thai stocks than they bought this week, according to exchange data.
Chinese industrial companies’ profits fell 1.7 percent from a year earlier to 467.2 billion yuan (US$73 billion) last month, a third month of declines, government data showed on Friday.
The yuan declined 0.11 percent this week to 6.3807 and touched 6.3967 on Wednesday, the weakest level since Sept. 29.
“The current slowdown has undoubtedly inflicted a lot of pain on the corporate sector,” Yao Wei (姚煒), a China economist at Societe Generale SA in Hong Kong, said on Friday.
The Philippine peso rallied for a second day after the central bank unexpectedly cut borrowing costs on Thursday, boosting optimism policymakers were stepping up efforts to help the country weather the global slowdown. Bangko Sentral ng Pilipinas lowered its overnight rate to a record low of 3.75 percent from 4 percent.
The peso’s weekly loss was pared to 0.1 percent, aided by a 0.5 percent rally on Friday to 41.908. The currency has strengthened 4.5 percent this year, the biggest gainer among Asia’s 11 most-traded currencies, data compiled by Bloomberg show.
Elsewhere, Thailand’s baht gained 0.4 percent to 31.52 and South Korea’s won climbed 0.3 percent this week to 1,138.25. Vietnam’s dong declined 0.2 percent to 20,880.