The New Taiwan dollar dropped for an eighth week, its longest losing streak since October 2005, as uncertainty weighed on regional currenciesBloomberg
Asian currencies posted a weekly decline, led by the New Taiwan dollar and Indonesia’s rupiah, as overseas investors pulled funds out of the region’s stocks.
Six of the 10 most-traded currencies in Asia outside of Japan fell this week as funds abroad sold more shares than they bought in Taiwan, the Philippines and Thailand.
The MSCI Asia-Pacific Index of shares declined for a second week. Investors pared holdings of riskier assets as shares in Lehman Brothers Holdings Inc slid on concern that the securities firm will fail to find buyers and raise capital.
“There’s a lot of uncertainty weighing on the regional currencies right now,” said David Cohen, director of Asian forecasting at Action Economics in Singapore. “Volatility will likely continue for the near term. The equity markets everywhere are getting clobbered, so investors are shifting away from emerging markets.”
The NT dollar fell 0.5 percent this week to NT$32.041 as of the 4pm close in Taipei, according to Taipei Forex Inc. The currency declined for an eighth week, the longest losing streak since October 2005. Indonesia’s rupiah fell 0.6 percent this week to 9,435.
The NT dollar traded near a seven-month low on speculation the central bank would cut borrowing costs. The central bank may lower interest rates at its next policy meeting on Sept. 25 to help revive the economy, the Chinese-language Economic Daily News reported on Friday, without identifying its sources.
Asian currencies also weakened as the US dollar rose to the strongest in a year against the euro on evidence the economic slump that began in the US has spread to the rest of the world.
Overseas investors were net sellers of Taiwan’s stocks for nine of the last 11 trading days, selling NT$82.8 billion (US$2.58 billion) more than they bought during that period as the TAIEX index declined 11.7 percent.
The NT dollar is “relatively stable,” the central bank said on Thursday for the fifth time since Aug. 8.
The Philippine peso declined for a seventh week against the US dollar, its longest losing streak since June.
The peso dropped to the lowest level in a year as foreign funds sold Philippine shares every day this month.
Fund managers sold US$397.2 million more Philippine bonds and stocks than they bought for the first seven months of the year, compared with US$3.6 billion in net purchases in the same period a year earlier, data from the central bank showed.
“The peso’s decline is driven by investors reducing their exposures in emerging markets including the Philippines,” said Antonio Espedido, treasurer at China Banking Corp in Manila.
The peso fell 0.1 percent in the week to 46.895 per dollar, according to Tullett Prebon PLC. The Philippine currency traded near the lowest level since Sept. 12 last year.
The Thai baht had its eighth weekly decline on concerns that the political impasse will drag on, deterring overseas investors.
The currency dropped to its lowest level in more than a year after lawmakers postponed a vote on Friday to select a new prime minister after lawmakers boycotted the session to prevent the re-election of former Thai prime minister Samak Sundaravej, who was ordered to step down this week.
The baht slipped 0.2 percent this week to 34.67, according to data compiled by Bloomberg. It dropped to 34.86 to the US dollar on Friday, its lowest level since Aug. 23 last year, when it traded at 35.79. The baht will drop to 36 by the end of the year, Yetsenga said.
South Korea’s won rose for the first week in seven as stock gains and intervention signs outweighed speculation that overseas investors will dump the nation’s assets.
The won rose 0.8 percent this week to 1,109.05 per US dollar, according to Seoul Money Brokerage Services Ltd.
Elsewhere in the week, the Malaysian ringgit rose 0.5 percent to 3.4435 and the Singapore dollar gained 0.2 percent to S$1.4356. Vietnam’s dong gained 0.1 percent to 16,580.
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