New Taiwan dollar, won plunge as exports tumble


Sun, Feb 22, 2009 - Page 10

Asian currencies had their biggest weekly drop in four months, led by South Korea’s won and the New Taiwan dollar, on concern tumbling exports will drag more local economies into recession.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, slid to its lowest level since Nov. 21.

The NT dollar sank to its lowest in more than five years, while the won declined below 1,500 per dollar for the first time since November.

Reports this week showed Taiwan’s economy shrank at the fastest pace on record and Singapore’s exports fell the most in at least 22 years.

“We have seen some liquidity crunch in the US dollar,” said Tetsuo Yoshikoshi, senior economist at Sumitomo Mitsui Banking Corp in Singapore. “The economies in this region have been weakening quite sharply. That is the basic reason why Asian currencies are quite weak.”

The NT dollar slid 2.2 percent this week to NT$34.808, dropping for a second week. It had touched NT$34.850, the lowest level since April 2003.

The won ended the week 6.8 percent lower at 1,506 per dollar in Seoul, this year’s biggest drop, Seoul Money Brokerage Services Ltd said.

The Malaysian ringgit fell 2.3 percent for the week to 3.6890, the lowest in more than two years.

Citigroup Inc forecast the currency will slide to 3.8000 by the end of June, the level it was pegged at for about seven years before a fixed exchange rate ended in July 2005.

Singapore’s non-oil domestic exports dropped 35 percent from a year earlier in January, while Taiwan’s economy shrank 8.4 percent in the fourth quarter of last year, official figures show. Both economies, along with Japan, the US and Europe, are in recession. South Korea’s economy, which shrank the most in a decade last quarter, is deteriorating, Finance Minister Yoon Jeung-hyun said on Wednesday.

Elsewhere, the Indonesian rupiah slid 1.6 percent this week to 11,960, a sixth straight week of losses. The Philippine peso dropped 2.5 percent to 48.30, the biggest weekly decline in more than eight years. The Thai baht fell 1.6 percent, to 35.71. Vietnam’s dong was little changed at 17,482.50 from 17,484.50 last week.

The euro firmed against the US dollar on Friday as traders took profit at the end of a week riven with worries over US economic rescue efforts and the crisis in Central and Eastern Europe.

The euro traded at US$1.2824 at 10pm GMT, compared with US$1.2673 late on Thursday.

But the euro weakened against the yen, falling to ¥119.63 against ¥119.35.

The dollar also fell against the yen, to ¥93.29 from ¥94.18.

In late New York trading, the dollar fell to 1.1563 Swiss francs from SF1.1735 late on Thursday.

The pound was at US$1.4421 against US$1.4293.