BLBG:Asian Currencies Weaken, Led by Rupiah, on U.S. Deficit-Cutting Concern
Asian currencies fell, led by Indonesia’s rupiah, as speculation U.S. lawmakers will struggle to reach an agreement on deficit-cutting measures prompted investors to sell higher-yielding emerging-market assets.
The Bloomberg-JPMorgan Asia Dollar Index dropped for a sixth day after a U.S. congressional super committee indicated it would be difficult to bridge disputes over taxes and spending by a Nov. 23 deadline. The MSCI Asia-Pacific index of stocks declined for a fifth day as Singapore forecast slower economic growth next year. Deutsche Bank AG Chief Executive Officer Josef Ackermann said yesterday Europe needs a “firewall” to contain its debt crisis.
“The likely collapse of an agreement among the U.S. congressional budget-deficit panel would hurt risk sentiment,” said Rees Kam, a Hong Kong-based senior strategist at SJS Markets Ltd. “That’s the main reason driving Asian currencies down as well as equities. Market participants are still worried about the situation in the euro zone.”
The rupiah slid 0.6 percent to 9,075 per dollar as of 10:15 a.m. in Jakarta, according to prices from local banks compiled by Bloomberg. Malaysia’s ringgit fell 0.3 percent to 3.1705 and Thailand’s baht dropped 0.2 percent to 31.04.
The rupiah fell for a fifth day, its longest losing streak in more than two months. Bank Indonesia Deputy Governor Hartadi Sarwono said in October policy makers will sell the dollar when needed to ease currency volatility.
Singapore Growth
“The debt issue has shifted to the U.S. now, prompting people to move to safe havens like the dollar,” said Bambang Eko Joewono, the Jakarta-based head of the global-markets division at PT Bank UOB Indonesia. “Bank Indonesia will come in and defend the currency at 9,125.”
Southeast Asia’s biggest economy will grow 6.5 percent next year, compared with a previous estimate of 6.7 percent, Bank Indonesia said last week.
The ringgit retreated for a third day as Singapore, the nation’s second-biggest export market, forecast its economy will grow 1 percent to 3 percent next year after expanding 5 percent in 2011.
“The weaker Singapore economic forecast for 2012 is weighing on sentiment,” said Zulkiflee Nidzam, head of foreign- exchange trading at Asian Finance Bank Bhd. in Kuala Lumpur. “The Malaysian currency could weaken to 3.20 to the dollar.”
China’s yuan snapped a two-day decline after Premier Wen Jiabao told U.S. President Barack Obama that China will push forward with exchange-rate reform.
More Yuan Flexibility
Policy makers will move to allow more flexibility in an active, gradual and controllable manner, the official China Central Television cited Wen as telling Obama on Nov. 19 at a summit of Asian leaders in Bali, Indonesia.
The yuan strengthened 0.02 percent to 6.3540 per dollar in Shanghai, according to the China Foreign Exchange Trade System. It reached a 17-year high of 6.3354 per dollar on Nov. 14.
Elsewhere, South Korea’s won rose 0.1 percent to 1,137.89 per dollar. The Philippine peso and Taiwan’s dollar were little changed at 43.400 and NT$30.250, respectively.
To contact the reporter on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net.
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
