Asian Currencies Drop, Led by Rupee, on Greek Political Tension
The Bloomberg-JPMorgan Asia Dollar Index and the MSCI Asia- Pacific Index of shares dropped to their lowest levels since January. Alexis Tsipras, whose Syriza party placed second in Greek elections on May 6, said he would try to form a coalition government of left-wing parties that reject austerity measures needed to secure a European Union-led bailout. The risk of Greece leaving the euro by the end of 2013 has risen to as high as 75 percent, Citigroup Inc. said May 7.
“The main driver of the market is the Greek political situation, which creates a lot of uncertainties,” said Norawit Suparinayok, a foreign-exchange trader at Bangkok Bank Pcl. (BBL) “Asian currencies may remain weak for now.”
The rupee slumped 0.8 percent to 53.585 per dollar as of 1:58 p.m. in Mumbai, according to data compiled by Bloomberg. The won declined 0.4 percent to 1,140.35, while the ringgit slid 0.3 percent to 3.0660. The Philippine peso dropped 0.4 percent to 42.42 and Thailand’s baht weakened 0.1 percent to 31.04. The Asia Dollar Index lost 0.1 percent.
The won reached a two-week low of 1,141.20 per dollar as overseas investors sold more Korean shares than they bought for a sixth day. The Bank of Korea will leave its benchmark interest rate at 3.25 percent after a policy review tomorrow, according to all 17 economists in a Bloomberg News survey.
“Greece’s political struggle is the main issue in the market today, but declines in the won will be limited with exporters waiting to sell the dollar once the won weakens,” said Lee Yong Hee, a Seoul-based currency dealer at Industrial Bank of Korea. (024110)
The ringgit fell for a fifth day, the longest losing streak since mid-March, as government data showed exports shrank for the first time since 2009.
Overseas shipments fell 0.1 percent in March from a year earlier, after increasing 14.5 percent in February, government figures showed today.
“We may see some weakening” in exports and production in the coming months, said Yeah Kim Leng, chief economist at RAM Holdings Bhd. in Kuala Lumpur. “We will likely see greater headwinds from the negative impact of elections in Europe and that could cast negative sentiment over Asian currencies.”
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