Asian currencies headed for their biggest weekly drop in three months, led by South Korea’s won and Taiwan’s dollar, on concern tumbling exports will drag more of the region’s 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 Dec. 2. The won declined below 1,500 per dollar for the first time since November and Taiwan’s currency sank to a five-year low. Reports this week showed Singapore’s exports fell the most in at least 22 years and Taiwan’s economy shrank at the fastest pace on record. “We have seen some liquidity crunch in the U.S. 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 won declined 1.8 percent to 1,509.75 per dollar as of 2 p.m. in Seoul, headed for a weekly drop of 7 percent, according to Seoul Money Brokerage Services Ltd. Taiwan’s dollar slid 0.4 percent to NT$34.800, dropping for the 12th day in a row. It earlier touched NT$34.804, the lowest level since May 2003. The Malaysian ringgit fell 0.5 percent to 3.6755, the lowest in more than two years, and dropped 1.9 percent for the week. Citigroup Inc. forecast the currency will slide to 3.8 by the end of June, the level it was pegged at for about seven years before a fixed exchange rate ended in July 2005. Exports, GDP 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 2008, official figures show. Both economies, along with Japan, the U.S. and Europe, are in recession. South Korea’s economy, which shrank the most in a decade in the last quarter, is deteriorating, Finance Minister Yoon Jeung Hyun said Feb. 18. Thailand and Malaysia will announce data for gross domestic product next week, with economists surveyed by Bloomberg News forecasting a contraction for Thailand and the slowest pace of growth since 2001 for Malaysia. Taiwan and Vietnam will issue data on exports. Policy makers at the Bank of Thailand also meet next week, with analysts in a separate survey expecting them to cut the benchmark interest rate by 50 basis points to 1.5 percent. The euro fell against the dollar and the yen on speculation European Central Bank President Jean-Claude Trichet will signal in a speech today that he may cut rates to spur growth in the region. Asia Currency Fund Europe’s currency dropped to $1.2583 in Tokyo from $1.2674 late in New York yesterday. The euro weakened to 118.50 yen from 119.37 yesterday, when it reached 120.34 yen, the highest level since Jan. 19. The won has plunged 17 percent so far this year, making it the worst performer among the 10 most-traded Asian currencies outside Japan. None of the currencies has gained. “The won has come under pressure with concerns about dollar funding in Korea and repaying of short-term debt,” said Callum Henderson, head of global currency strategy at Standard Chartered Plc in Singapore. “There’s a significant amount of short-term debt coming due, but compared to the fourth quarter last year, it’ll be less of a problem this time around.” South Korean banks’ demand for dollars is decreasing as foreign-currency debt maturing every month this year is at least 50 percent lower than in the fourth quarter, the central bank said this week. Finance ministers from the 10-member Association of Southeast Asian Nations and their three northern neighbors will meet in Thailand on Feb. 22 to expand a pool of foreign-exchange reserves to protect their currencies. Some officials said they will increase the funds by 50 percent to $120 billion to protect their currencies. Elsewhere, the Indonesian rupiah slumped 0.8 percent to 12,075 per dollar, set for a 2.5 percent weekly loss. The Philippine peso and the Thai baht both dropped 0.5 percent, to 48.213 and 35.74, respectively. Vietnam’s dong was little changed at 17,482.50.

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