SINGAPORE: Indonesia's rupiah hit a near two-month low on Thursday, prompting a warning from the central bank of potential intervention if the fall accelerated, while most emerging Asian currencies slumped amid uncertainty over a Greek debt deal.
Malaysia's ringgit slipped as a narrower current account surplus in the fourth-quarter offset stronger-than-expected growth.
Singapore's dollar hit its weakest since August 2010 as hedge funds sold the city-state's currency.
As if to extend the downward spiral for regional currencies, the South Korean won fell to its lowest in more than five weeks, while the Indian rupee touched a one-month low.
The rupiah fell 1 percent to 12,835 per dollar - its weakest since Dec. 16 - while government bond prices also declined. That came ahead of the fourth-quarter current account data due on Friday.
Foreign banks unloaded the rupiah, while local companies chased the dollar, traders said.
"We have been stopped out of our short USD/IDR trade," said Jonathan Cavenagh, senior FX strategist with Westpac, in a client note.
"A push through the 13,000 levels in terms of the 1 month NDF is certainly a risk in the near term. It may well be the case that the market needs to see a firmer domestic backdrop in Indonesia before looking for lower levels in USD/IDR."
The rupiah's one-month non-deliverable forwards (NDFs) earlier weakened to 12,975 per dollar, its lowest since Dec. 17.
In overnight markets, offshore real money accounts and hedge funds sold the currency in NDFs.
The central bank said it will support the rupiah if it drop proved precipitous.
"We are monitoring the volatility. If it weakens drastically, we will enter the market," said Bank Indonesia spokesman Peter Jacobs.
A Jakarta-based currency trader said the authority was spotted buying the rupiah from the session low of 12,835.
The rupiah was the second-worst performing emerging Asian currency after the ringgit, with a 3.4 percent loss against the dollar, according to Thomson Reuters data.
Indonesia's current account deficit has left the nation more exposed than most Asian countries to capital flight when the US Federal Reserve starts raising rates later this year.
Bank Indonesia is targeting a current account shortfall between 2.5-3 percent of gross domestic product, as anything higher would be "dangerous", its governor said on Jan. 29.
RINGGIT
The ringgit fell on data showing Malaysia's current account surplus fell to 6.1 billion ringgit ($1.7 billion) in the fourth quarter from a 7.6 billion ringgit in the previous three months.
"This continues the rapid, if not volatile, decline in the current account surplus that has exposed MYR to the risk of violent capital account outflows," Sacha Tihanyi, senior currency strategist for Scotiabank said in a research note.
The bank expects the ringgit to weaken to 3.7600 per dollar by the year-end. The Malaysian unit fell 0.7 percent to 3.6230 as of 0550 GMT.
The ringgit is expected to stay weaker on still-vulnerable oil prices following their collapse over the last six months, and on concerns over debt payments by 1Malaysian Development Board (1MDB). The Malaysian fund has a nearly $12 billion debt pile.
Malaysian billionaire Ananda Krishnan is preparing to settle a $550 million loan owed by 1MDB, four sources familiar with the matter said - a last-minute reprieve for the fund whose debt woes are pressuring the ringgit and the country's sovereign credit rating.
Government bond prices fell, while Kuala Lumpur stocks lost 0.7 percent.
The won lost 1.2 percent to 1,111.3 per dollar, its weakest since Jan. 5, as offshore funds' supplies overwhelmed demand from exporters.
The South Korean currency came under pressure as the yen weakened past 120 per dollar.
Comments
Comments are closed for this article.