Asian currencies may remain weak in 2009 on slowing inflation, weaker growth and deteriorating exports, according to Brown Brothers Harriman & Co. Singapore’s economy contracted in the fourth quarter more than economists estimated, and exports in South Korea, Taiwan and Thailand fell at least 17 percent in November, signaling those countries may face a deeper recession, wrote Win Thin, senior currency strategist in New York, in a research report today. Thin also said he expects more interest-rate cuts for the region, which could lead to weakness in Taiwan’s dollar and the Indonesian rupiah. “The worst may be over in terms of currency weakness, but a sustained emerging-market rally will be difficult until well into 2009,” Thin wrote. “Given the deteriorating economic conditions in the region, we believe Asian policy makers may not want to see significantly stronger currencies for the time being.” Singapore’s gross domestic product contracted an annualized 12.5 percent in the fourth quarter from the previous three months, after shrinking a revised 5.4 percent from July to September. The government said Jan. 2 the economy may shrink 2 percent this year, twice as much as it predicted Nov. 21. The Singapore dollar was one of only three major currencies to gain against the U.S. dollar in 2008, climbing 0.7 percent. It has fallen 2.9 percent in 2009. The South Korean won had the biggest decline against the dollar among major Asian currencies last year, plummeting 26 percent.

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