SINGAPORE, Sept 24: The Indonesian rupiah fell to its lowest level in four and a half years on Tuesday, leading slides among emerging Asian currencies amid uncertainty over whether the US Federal Reserve will begin scaling back its stimulus later this year.
The rupiah lost ground on increasing dollar demand from local companies for month-end payments.
The Malaysian ringgit and the Philippine peso also slid as offshore funds sold them, traders said.
Regional stocks also eased as Fed officials suggested the Fed could still begin scaling back its stimulus later this year, after last week’s surprising decision to maintain the programme at $85 billion a month.
‘Despite last week’s shock, the market is pricing in a view that the Fed will eventually taper within this year,’ said Yuna Park, a currency and bond analyst at Dongbu Securities in Seoul.
‘Asian currencies may not fall much further from here due to the dollar’s overall weakness, but it looks better to sell them on rallies,’ Park added.
The dollar was under pressure as New York Fed President William Dudley, a well known dove and close ally of Fed Chairman Ben Bernanke, justified the action, saying on Monday the central bank must for now continue to push hard against threats to the economy.
RUPIAH
The rupiah fell to as low as 11,580 per dollar, its weakest since April 2009.
Indonesia’s central bank was spotted providing dollar through state-run banks to support the ailing currency, traders said.
Some local lenders bought the rupiah, but corporate dollar demand overwhelmed such bids, traders added.
‘The rupiah is seen testing 11,600 this week,’ said a Jakarta-based trader.
‘As long as there is month-end demand, it is a bit difficult to see a rebound,’ the trader added.
RINGGIT
The ringgit started the day firmer but turned lower as offshore funds and local interbank speculators sold it.
Kuala Lumpur stocks fell, while 3-year and 10-year government bond yields rose.
‘The market seems in a revenge mode after the last week’s mauling,’ said a senior Malaysian bank trader in Kuala Lumpur.
The Malaysian currency jumped 3.9 percent against the dollar last week after the Fed’s decision to stand pat on stimulus.
The trader looked to sell the ringgit on rallies around 3.2000 per dollar for 3.2400.
PHILIPPINE PESO
The peso fell as investors including offshore funds covered dollar-short positions on overall weakness in regional currencies, traders said.
The Philippine currency found some support around 43.400
Per dollar as some offshore investors bought it on dips.
The International Monetary Fund said the Philippines was well positioned to deal with any capital outflows when the Fed cuts its stimulus, although the body slightly lowered its growth forecast for the country.
‘I would rather buy dollars but recon it’s not a one-way bet,’ said a senior Philippine bank trader in Manila.
‘It is still range bound between 43.10 and 43.50 in the short term.’
CURRENCIES VS U.S. DOLLAR
Change on the day at 0430 GMT
Currency Latest bid Previous day Pct Move
Japan yen 98.79 98.84 +0.05
Sing dlr 1.2530 1.2501 -0.23
Taiwan dlr 29.560 29.629 +0.23
Korean won 1075.30 1073.80 -0.14
Baht 31.28 31.26 -0.06
Peso 43.36 43.27 -0.22
Rupiah 11522.00 11470.00 -0.45
Rupee 62.73 62.60 -0.21
Ringgit 3.2040 3.1990 -0.16
Yuan 6.1194 6.1210 +0.03
Change so far in 2013
Currency Latest bid End prev year Pct Move
Japan yen 98.79 86.79 -12.15
Sing dlr 1.2530 1.2219 -2.48
Taiwan dlr 29.560 29.136 -1.43
Korean won 1075.30 1070.60 -0.44
Baht 31.28 30.61 -2.14
Peso 43.36 41.05 -5.33
Rupiah 11522.00 9630.00 -16.42
Rupee 62.73 54.99 -12.34
Ringgit 3.2040 3.0580 -4.56
Yuan 6.1194 6.2303 +1.81 (agencies)
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