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Asian currencies broadly declined on Monday as the Chinese yuan weakened further, while shares also fell ahead of several central bank meetings this week, including a US Federal Reserve rate decision on Wednesday.

Thailand’s baht bucked the regional trend to strengthen 0.4% after the country’s central bank on Friday said it was ready to manage any excessive moves in the currency.

Leading losses in Asia, the yuan fell 0.6% to 7.013 against the dollar after China’s central bank lowered the borrowing cost of 14-day reverse repos and stepped up cash injections. Malaysia’s ringgit hit a fresh 24-1/2 year low and Taiwan’s dollar hit its lowest level since September, 2019.

“The Fed looks set to dominate the narrative on risk assets. Against this backdrop, a mood of caution is likely to prevail ahead of the FOMC meeting mid-week,” said Mizuho bank economist Vishnu Varathan.

Currently, markets are pricing in at least another 75 basis point increase for this week’s Federal Open Market Committee’s (FOMC) meeting, and 19% odds of a super-sized full percentage point rise.

The relentless ascent of the dollar and US yields have weighed heavily on riskier Asian assets, with several currencies hitting multi-year lows on Friday.

The Bank of Thailand said on Friday it was closely monitoring its currency and was ready to “to take action when the baht moves in an unusually volatile way”. The baht hit its weakest level in nearly 16 years on Friday.

Thai baht, yuan lead losses among Asian currencies ahead of Fed conference

Aside from the Fed, Asia-focused investors will also be on the lookout for central bank meetings in Japan, Indonesia, Taiwan and the Philippines, as well as a decision on China’s loan prime rate. The week is also littered with inflation data from Japan, Singapore and Malaysia.

Bank Indonesia, the Bangko Sentral ng Pilipinas and the Central Bank of the Republic of China are all expected to hike interest rates this week, with Japan being the exception.

The Bank of Japan has so far shown no sign of abandoning its uber-easy monetary policy despite the drastic slide in the yen .

The yen was down 0.2% at 143.21 on Monday.

“The effect of verbal interventions in the yen has faded, but a move in USD/JPY towards 145 could spark further concern from the Japanese authorities,” said Jessica Amir, market strategist at Saxo Capital Markets.

Share markets in Asia also fell on Monday, with a weak Friday session on Wall Street souring sentiment in Asian trading. Equities in Manila fell 1.6% in their fifth straight session of losses.

The index hit its lowest level since Aug. 10. Shares in Seoul and Kuala Lampur both hit a two-month low. Shares in Taipei were down 0.7%.

Shares in Thailand were up 0.3%, after the country’s finance minister said on Saturday the economy is expected to grow by 3% to 3.5% this year and 3% to 4% next year, helped by increased exports and a pickup in the vital tourism sector.

Highlights

** China c.bank cuts 14-day reverse repo rate, steps up cash injections

** Thailand GDP to grow 3%-3.5% this year as tourism rebounds – finmin

** China to accelerate projects, boost consumption to spur recovery

** India’s RBI says front-loaded rate hikes needed to tame inflation, shield growth

** Biden says US forces would defend Taiwan in the event of a Chinese invasion

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