Asia Currencies Fall in November on Fund Outflows as Economic Growth Cools

Asian currencies fell this month, led by the Indian rupee’s slide to a record low, as foreign investors cut holdings of the region’s shares on concern Europe’s debt crisis will hurt exports.

Global funds sold $5.7 billion more Indian, South Korean and Taiwanese equities than they bought this month, according to exchange data. Philippine gross domestic product increased less than economists predicted last quarter and Thailand’s factory output slumped by the most in more than a decade in October, government reports showed this week. India said today its economy expanded at the slowest pace since 2009.

The rupee slumped more than 7 percent this month to 52.4050 per dollar as of 1:49 p.m. in Mumbai and touched a record low of 52.7300 on Nov. 22, according to data compiled by Bloomberg. Indonesia’s rupiah weakened 3.6 percent to 9,179 per dollar, according to prices from local banks compiled by Bloomberg. Malaysia’s ringgit lost 3.2 percent to 3.1745.

“Europe is still the biggest concern in the market now,” said Tarsicio Tong, a trader at Union Bank of Taiwan in Taipei. “Unless there’s anything earth-shattering happening in the euro zone, Asian currencies should remain stable toward the end of the year.”

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, dropped 1.8 percent in November to 114.95. South Korea’s won and Taiwan’s dollar rose today after euro-area officials agreed to extend the capacity of Europe’s stability fund.

Indonesia’s Intervention

The rupiah completed its biggest monthly decline since February 2009. The currency touched a 17-month low in November even after the central bank intervened in the market to limit exchange-rate losses.

Bank Indonesia is committed to stabilizing the rupiah by selling foreign currencies and buying government bonds in the secondary market, Perry Warjiyo, director for economic research and monetary policy at the central bank, said yesterday. The central bank unexpectedly reduced its benchmark interest rate by 50 basis points to 6 percent on Nov. 10.

“On the euro-zone worries, markets have been looking for positive signals,” said Radhika Rao, an economist at Forecast Pte in Singapore. “The Bank Indonesia rate cut was premature. There are constraints to how much the central bank can intervene.”

South Korea’s won slid 2.8 percent this month to 1,142.57 per dollar as a government report showed exports rose 8 percent in October from a year earlier, the smallest gain in two years.

Korea’s Output

The nation’s industrial output rose 6.2 percent from a year earlier in October after gaining 6.9 percent the previous month, government data showed today. Finance Minister Bahk Jae Wan said yesterday that sustaining growth will be a policy priority next year as the economy shows signs of slowing.

“Uncertainties in the financial market are making it difficult for investors to bet on a weaker dollar,” said Hong Seok Chan, a currency analyst at Daeshin Securities Co. in Seoul. “We hear positive economy reports occasionally, but they are not enough to relieve concerns regarding Europe’s debt problems.”

Elsewhere, the Thai baht dropped 1.5 percent this month to 31.20 per dollar. The Taiwan dollar fell 1.4 percent to NT$30.345, China’s yuan slipped 0.4 percent to 6.3799 and the Philippine peso lost 2.3 percent to close at 43.645 yesterday. Onshore financial markets were closed today in the Philippines for a public holiday.

To contact the reporters on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net; Andrea Wong in Taipei at awong268@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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