BLBG:Asia Currencies Drop on Concern Global Slowdown to Hurt Regional Exports
Asian currencies weakened, led by Indonesia’s rupiah, as concern the global economy is slowing dimmed the outlook for the region’s exports.
China set its annual economic growth goal at the lowest since 2004 as the central bank weakened the currency’s reference rate by the most since November 2010. The Bloomberg-JPMorgan Asia Dollar Index (ADXY), which tracks the region’s 10 most-active currencies excluding the yen, fell the most since Feb. 14. Spain raised its 2012 budget-deficit target on March 2, stoking speculation Europe’s debt crisis will worsen.
“China’s gross domestic product target means Asian growth forecasts will be dragged lower as most economies here are still export-driven,” said Vishnu Varathan, an economist at Mizuho Corporate Bank Ltd. in Singapore. “If developed markets aren’t showing sustained and minimum signs of growth, then Asia will feel some of this headwind.”
The rupiah dropped 0.6 percent to 9,135 per dollar as of 10:27 a.m. in Jakarta, according to prices from local banks compiled by Bloomberg. Malaysia’s ringgit weakened 0.4 percent to 3.0155, the Philippine peso declined 0.4 percent to 42.83 and South Korea’s won depreciated 0.3 percent to 1,118.90.
Premier Wen Jiabao set a 7.5 percent GDP target for 2012 in a state-of-the-nation speech at the National People’s Congress in Beijing today. China including Hong Kong is the single largest export market for Taiwan, Malaysia and Thailand. The People’s Bank of China weakened the yuan’s daily fixing by 0.22 percent, the most since November 2010. The yuan fell 0.11 percent to 6.3049.
Malaysia’s Exports
The ringgit fell to its lowest level in almost a week before government export data this week. Overseas sales increased 3 percent from a year earlier in January, the least since October 2010, according to the median estimate of economists in a Bloomberg News survey before the March 7 report.
The rupiah declined for a third day after global investors cut holdings of the nation’s bonds by the most since September. Foreign funds sold 9 trillion rupiah ($984 million) more government securities than they bought in February, according to data from the finance ministry.
“The news from Spain signals that there is still an ongoing debt issue in Europe,” said Apressyanti Senthaury, a Jakarta-based research analyst in the treasury division of PT Bank Negara Indonesia. “Bank Indonesia will keep the rupiah from weakening too drastically.”
The won snapped four days of gains as the Kospi (KOSPI) index of shares dropped. The central bank will hold its benchmark interest rate at 3.25 percent on March 8, according to all 14 economists surveyed by Bloomberg News.
“The won will level off as investors seek profits after the recent rally,” said Byeon Ji Young, a Seoul-based currency analyst at Woori Futures Co. “Europe-related issues are making it difficult for the currency to strengthen further.”
Elsewhere, the Thai baht dropped 0.4 percent to 30.67 per dollar and the Taiwan dollar slipped 0.1 percent to NT$29.482. India’s rupee lost 0.5 percent to 49.75.
To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net.
