Asian currencies headed for their biggest weekly advance this year, led by South Korea’s won and the Malaysian ringgit, as regional central banks raised interest rates and concern eased that Greece will default. Taiwan raised borrowing costs yesterday following increases last month in India and Korea, boosting the yield advantage for the region’s debt. Overseas investors were net buyers of more than $1.6 billion of stocks in India, Indonesia, Korea, Thailand, Taiwan and the Philippines this week through yesterday. Lawmakers in Greece backed a bill to authorize an austerity plan required to keep rescue aid flowing. The vote in Greece “has allowed investors to think beyond the euro-region and realize that growth prospects in Asia are stronger than rest of the world,” said Mirza Baig, a Singapore- based currency strategist at Deutsche Bank AG. “The regional central banks are raising interest rates and that shows the confidence of policy makers in their economies. We have seen inflows into equities.” The won rose 1 percent this week to 1,067.95 per dollar as of 10:40 a.m. in Seoul, according to data compiled by Bloomberg. The ringgit strengthened 0.9 percent to 3.0185, India’s rupee added 0.7 percent to 44.6975 and the Philippine peso appreciated 0.4 percent to 43.263. Taiwan’s dollar advanced 1 percent to NT$28.689. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-traded currencies excluding the yen, rose 0.6 percent, the most since the week ended Dec. 31. Greek Prime Minister George Papandreou’s drive to stave off the euro area’s first sovereign default stayed on track after lawmakers approved a budget-cutting package. Rate Increases Taiwan’s central bank raised the discount rate on 10-day loans to banks to 1.875 percent from 1.75 percent. All 18 economists in a Bloomberg News survey predicted the decision, after increases of the same amount in each of the previous four quarters. The won headed for a second weekly advance after a government report today showed inflation accelerated. Consumer prices rose 4.4 percent, after a 4.1 percent gain in May, exceeding the central bank’s target for a sixth straight month. Exports increased 14.5 percent in June from a year earlier, resulting in a trade surplus of $3.3 billion. “The rise in consumer prices is reinforcing market sentiment that authorities may allow the won to appreciate, in order to alleviate price pressure,” said Byeon Ji Young, currency analyst at Woori Futures Co. in Seoul. Exports Rise The ringgit headed for the first weekly gain in a month after global funds added to holdings of the nation’s assets. Foreign investors raised ownership of ringgit-denominated debt by 93 percent in May from a year earlier to 181.5 billion ringgit ($60 billion), according to data published Bank Negara Malaysia late yesterday. Exports rose 11 percent in May from a year earlier after having increased 11.1 percent the previous month, according the median forecast of economists in a Bloomberg survey before government data due on July 5. “The market is reacting to the positive headlines even though Greece by no means is out of the woods yet,” said Suresh Kumar Ramanathan, a currency strategist at CIMB Investment Bank Bhd. in Kuala Lumpur. Elsewhere, Indonesia’s rupiah gained 0.4 percent to 8,569 against the dollar and Singapore’s dollar appreciated 0.6 percent to S$1.2293. Thailand’s baht weakened 0.2 percent to 30.74 before July 3 elections that may trigger political unrest. To contact the reporter on this story: Khalid Qayum in Singapore at kqayum@bloomberg.net To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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