Asian currencies rose, led by Indonesia’s rupiah, as the Federal Reserve’s pledge to keep U.S. interest rates at near-zero levels for two more years helped shore up demand for equities and emerging-market assets. South Korea’s won strengthened by the most in a month and Malaysia’s ringgit rebounded from near its weakest level since June as the MSCI Asia-Pacific Index of shares advanced for the first time in seven days. The Federal Open Market Committee said yesterday that it would keep benchmark borrowing costs at a record low at least through mid-2013 and is “prepared to employ” additional tools to spur the U.S. economy. “The market interpreted the Fed statement as a possible sign of quantitative easing,” said Disawat Tiaowvanich, a foreign-exchange trader at Bangkok Bank Pcl. “More quantitative easing would lead to investors diversifying into other currencies and that would support Asian currencies.” The rupiah jumped 0.7 percent to 8,526 per dollar as of 9:04 a.m. in Jakarta, according to data compiled by Bloomberg. The ringgit climbed 0.7 percent to 3.0080, the won strengthened 0.5 percent to 1,082.97 and Thailand’s baht gained 0.3 percent to 29.83. China’s yuan advanced 0.20 percent to 6.4177, the most since April 27. The Standard & Poor’s 500 Index closed up 4.7 percent after the Fed announcement yesterday, rebounding from the biggest drop since 2008 on Aug. 8 after S&P cut the U.S. credit rating at the end of last week. The Fed has bought $2.3 trillion of debt in two rounds of so-called quantitative easing, boosting the supply of dollars available to invest in other countries. Korea Jobless Rate Global funds bought $4.2 billion more Indian, Indonesian and Philippine equities than they sold this year, according to exchange data, lured by growth and interest rates considerably higher than in developed countries. Developing economies in Asia will expand 8.4 percent in 2011, outpacing growth of 2.5 percent in the U.S. and 2 percent in countries using the euro, according to International Monetary Fund estimates released in June. The won rebounded from a three-month low as the nation’s unemployment rate held at the lowest level since November. The jobless rate was 3.3 percent in July, compared with the median estimate of 3.4 percent by economists in a Bloomberg survey. The government will take “all policy steps needed” to help stabilize financial markets, Financial Services Commission Vice Chairman Shin Je Yoon said. The commission imposed a three- month ban on short selling stocks effective today. Malaysia’s Factory Output “The news from the Fed and the recent steep falls will put upward pressure on the won today,” said Byeon Ji Young, a currency analyst at Woori Futures Co. in Seoul. “Appreciation will be limited as foreign investors may buy the dollar after recently selling the nation’s stocks.” The ringgit rose before a report today that economists surveyed by Bloomberg predict will show Malaysia’s industrial output shrank 0.8 percent in June from a year earlier after a 5.1 percent contraction in May. “The Fed’s statement is helping to revive interest in Asian currencies,” said Suzaizi Mohd Morshid, head of treasury at RHB Islamic Bank Bhd. in Kuala Lumpur. “The ringgit may stabilize at current levels.” Elsewhere, Taiwan’s dollar strengthened 0.2 percent to NT$28.985 against its U.S. counterpart. The Philippine peso gained 0.1 percent to 42.465 per dollar and the Singapore dollar appreciated 0.5 percent to S$1.2106 from Aug. 8. Financial markets were closed yesterday in Singapore for a public holiday. To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

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