Asian currencies weakened, led by the Singapore dollar, after the G-7 industrialized nations diluted demands on the region to strengthen currencies.
Finance ministers and central bankers from the G-7 in a statement issued over the weekend omitted an April call for Asian currencies to rise. Export-oriented economies in the region benefit from a weaker currency as it makes their goods cheaper overseas, helping trade surpluses.
"They didn't mention anything more specific at the G-7 about currency appreciation," said Ko Yun-jin, assistant manager of foreign-exchange trading at Kookmin Bank in Seoul. "So people are selling back Asian currencies."
The Singapore dollar dropped 0.5 percent to S$1.5879 against its US counterpart at 4.28pm. local time, the biggest decline in seven weeks, and the Malaysian ringgit fell 0.3 percent to 3.6797. The Korean won traded at 956.50, snapping three days of gains, according to Seoul Money Brokerage Services Ltd.
"Greater flexibility in the exchange rate is desirable in emerging economies that have large current-account surpluses," the G-7 said in a statement after their meeting in Singapore. The April call for stronger currencies in Asia, especially China, was left out.
A rising yuan may reduce export competitiveness, while increasing China's buying power for Asian goods, making it easier for regional central banks to let their currencies rise.
The current account is a broader measure of trade because it includes services income. China's trade surplus was a record for a fourth month last month as exports reached an all-time high, with the gap widening to US$18.8 billion from US$14.6 billion in July, the Beijing-based customs bureau said last week.
By backtracking, G-7 officials may be seeking to avoid a repeat of the dollar's slump triggered by the statement in April.
Government officials in the US, Europe and Japan want stronger currencies in Asia to help address global imbalances in trade.
The South Korean won on April 24, the first trading day after that month's G-7 statement, climbed the most since Jan. 12.
The Singapore dollar had the biggest increase since Feb. 23 and the Taiwan dollar and Malaysian ringgit posted the largest gains since Jan. 5.
More yuan flexibility will be introduced in a "progressive manner," People's Bank of China Governor Zhou Xiaochuan (
The Philippine peso, the world's best performer this month, gained for a fifth day to a four-year high after the government reported a budget surplus last month. The excess was 14 billion pesos (US$279 million), Finance Assistant Secretary Gil Beltran said in Manila.
"The peso has done quite well amongst the regional currencies," said Thio Chin Loo, senior currency strategist at BNP Paribas SA in Singapore. "One reason is the fiscal improvement we've seen."
The peso advanced 0.1 percent to 50.20 against the dollar, the strongest close since June 18, 2002, and taking gains this month to 1.2 percent, according to the Bankers Association of the Philippines. It will rise to 50 by the end of this year, Thio said.
Thailand's baht dropped 0.2 percent to 37.31 against the dollar. It is the best performer this year among the 15 Asia-Pacific currencies, gaining 10 percent.
The baht is "at par" with regional currencies and may end the year at about 37.50, Finance Minister Thanong Bidaya said.
"We look at it in such a way that as long as we have a current-account surplus, that's where the baht's level is appropriate," Thanong said in an interview in Singapore on Sunday. "The baht was quite weak in the previous two years, so it's a readjustment with trading partners."
Rising exports and tourism revenue helped caretaker Thai Prime Minister Thaksin Shinawatra's government post a current-account surplus for a second month in July and has contributed to a strengthening of the nation's currency.
Taiwan’s foreign exchange reserves fell below the US$600 billion mark at the end of last month, with the central bank reporting a total of US$596.89 billion — a decline of US$8.6 billion from February — ending a three-month streak of increases. The central bank attributed the drop to a combination of factors such as outflows by foreign institutional investors, currency fluctuations and its own market interventions. “The large-scale outflows disrupted the balance of supply and demand in the foreign exchange market, prompting the central bank to intervene repeatedly by selling US dollars to stabilize the local currency,” Department of Foreign
ENERGY ISSUES: The TSIA urged the government to increase natural gas and helium reserves to reduce the impact of the Middle East war on semiconductor supply stability Chip testing and packaging service provider ASE Technology Holding Co (日月光投控) yesterday said it planned to invest more than NT$100 billion (US$3.15 billion) in building a new advanced chip testing facility in Kaohsiung to keep up with customer demand driven by the artificial intelligence (AI) boom. That would be included in the company’s capital expenditure budget next year, ASE said. There is also room to raise this year’s capital spending budget from a record-high US$7 billion estimated three months ago, it added. ASE would have six factories under construction this year, another record-breaking number, ASE chief operating officer Tien Wu
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek (深度求索), seen as a benchmark for China’s progress in the fast-moving field. More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals. However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight. Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new
RSS