Asian currencies drop on Federal Reserve rumors


Sun, Feb 24, 2013 - Page 15

Asian currencies dropped this week, led by Malaysia’s ringgit and South Korea’s won, on speculation the US Federal Reserve will not extend monetary easing and regional central banks would intervene to curb appreciation.

Policymakers should be ready to vary the pace of US$85 billion a month of debt buying, which has boosted the supply of US dollars and spurred inflows to emerging markets, according to minutes of the Federal Open Market Committee’s Jan. 29 and 30 meeting released on Wednesday.

The Dollar Index rallied 0.8 percent that day and 0.5 percent the next. Central bank officials in South Korea and the Philippines said this week they would act to curb currency swings.

The New Taiwan dollar strengthened 0.3 percent this week to NT$29.658 against the greenback on Friday, according to prices from Taipei Forex Inc.

The NT dollar is the worst performer this year after the Japanese yen among 11 widely traded Asian currencies tracked by Bloomberg.

The Taipei foreign exchange market was open yesterday, a regular workday in compensation for an extra holiday during the Lunar New Year holiday. The NT dollar closed unchanged at NT$29.658 after fluctuating in a narrow range in thin trade, dealers said.

Turnover fell to just around US$200 million at the end of session as many foreign traders were away on the weekend, while local investors lacked any leads as other regional markets were closed.

In a bid to slow down the pace of the New Taiwan dollar’s appreciation, the central bank again bought into the US dollar, which helped the greenback recoup its early losses by the end of the session, dealers added.

In addition, local traders had no cues from other regional markets, which were all closed for the weekend, so local trade appeared very quiet, dealers said.

The ringgit dropped 0.8 percent this week to 3.1015 per US dollar in Kuala Lumpur, according to data compiled by Bloomberg. The won fell 0.6 percent to 1,084.68, Indonesia’s rupiah declined 0.4 percent to 9,709 and the Philippine peso weakened 0.2 percent to 40.685.

The Malaysian currency had its first weekly decline in three after a composite index based on a survey of purchasing managers in services and manufacturing in the 17-nation eurozone decreased to 47.3 this month from 48.6 last month, data from London-based Markit Economics showed on Thursday.

Elsewhere in the region, China’s yuan lost 0.04 percent to 6.2351, Vietnam’s dong dropped 0.2 percent to 20,885, Thailand’s baht was steady at 29.85 and India’s rupee rose 0.1 percent to 54.1850.