Most emerging Asian currencies edged weaker on Monday, with investors slightly unsettled by a slump in Turkey's lira after President Tayyip Erdogan sacked a hawkish central bank governor, replacing him with a critic of high interest rates.
As markets opened, Turkey's lira plunged 15% to near its all-time low in reaction to President Tayyip Erdogan's removal of Governor Naci Agbal over the weekend.
The Indonesian rupiah weakened 0.2% against the dollar, while the Philippine peso and the Thai baht dropped 0.1% each.
"The slide in the lira will probably have only a limited spillover impact into Asia. What is happening in Turkey is very country-specific and doesn't really have any direct bearing on Asia," said Khoon Goh, head of Asia research at ANZ Banking Group.
"The immediate knee jerk reaction has been a bit of a risk-off mood during Asian trading session. But I don't see any longer-term impact. Once the market digests the news, the trading in Asia is likely to reflect the region's overall fundamentals".
Bucking the trend, South Korean won strengthened slightly after preliminary data showed the country's exports during the first 20 days of March jumped 12.5% from a year earlier, when the country was still dealing with its first outbreaks of the coronavirus.
Investors also eyed central bank meetings in the region later in the week. Unlike other emerging economies like Russia and Turkey, which have already embarked on a monetary tightening cycle, Asian central banks have stood pat on rates.
Last week, Indonesia and Taiwan kept their key interest rate steady, while central banks in Philippines and Thailand are also expected leave rates unchanged at their meetings during the week.
"I expect Asian central banks to keep their rates on hold for quite some time", Khoon said, adding that there's no pressure on any central bank in Asia to hike rates.
"The fundamentals here are very different from what we're seeing in Turkey and Russia."
Safe-haven currencies like the Japanese yen and the US dollar strengthened, pointing towards a "risk off" environment.
Equities presented a mixed front. Indonesian and Thai shares fell 0.6% and 0.3% respectively, while Singapore and Taiwan climbed 0.4% each.
A spike in COVID-19 cases in the region remained a cause of concern. India reported its biggest daily jump in cases in four months on Sunday, while Philippines is set to expand tighter COVID-19 rules and restrict travel to battle a renewed surge in infections.
Sino-US tensions continued to weigh on sentiment as US and Chinese officials concluded on Friday what Washington called "tough and direct" talks in Alaska.