SINGAPORE: Most emerging Asian currencies depreciated for the third straight session on Wednesday as market participants steered clear of riskier assets, pressured by surging US Treasury yields.
The Thai baht and the Malaysian ringgit hovered near 11-month lows. Meanwhile, the Indonesian rupiah continued to veer around 10-month lows after erasing all the gains so far this year on Tuesday.
All three currencies logged three straight sessions of losses.
Shares in Asia were also subdued with equities in Singapore , South Korea and Indonesia declining between 1.1% and 2.3%.
US Treasury yields, which hit 16-year high after new data raised fears that the Federal Reserve would keep interest rates higher for longer, triggered a sell-off in riskier Asian assets.
“We expect Asia excluding Japan on the whole to slip back further amid recession risks; albeit prone to two-way volatility and differentiated outcomes,” analysts at Mizuho Bank said.
The rout in Asian currencies caught the attention of central banks including Bank Indonesia, which intervened in the foreign exchange market on Tuesday to manage the supply and demand of US dollars, and on Wednesday bought government bonds to instil confidence in the market.
Indonesia’s 10-year yields scaled a fresh 10-month peak of 7.067%.
The Singapore dollar weakened up to 0.2% to 1.3754 per dollar while shares lost up to 1.8% to hit their lowest level since early July.
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