Most emerging Asian currencies fell sharply on Monday, with the Indian rupee sinking to an all-time low, as investors continued hoarding dollars in a bid to stay liquid amid a worsening coronavirus epidemic.
A rising tide of national lockdowns and restrictions on travel and daily life has heightened fears of a deep recession, overshadowing efforts by policymakers to soften the blow.
Despite recent easing measures by the US Federal Reserve, the dollar has maintained its strength as the uncertainty around the virus spread and its impact has accelerated the flight to cash and pushed investors to liquidate holdings across asset classes.
"We need to see clear signs of government actions around the world to flatten out the infections curve, make tests available on a mass scale, and offer reliable data which shows signs of slowing infection rate. Till then the liquidation wave is likely to continue," said Mahesh Sethuraman, deputy head of global sales trading at Saxo Capital Markets.
Among Asian currencies, the Indian rupee plunged 1.3% to a record low of 76.14 per dollar, in line with a rout in the domestic equity market.
Several Indian states have imposed lockdowns until the end of March, while experts have said the number of cases mirrors rates during the early stages of the outbreak in other countries, which then went on to see very rapid growth.
The South Korean won shed 1.5%, while the Singapore dollar slid 0.7% to 1.459, its weakest since July 2009.
An unexpected rate cut by the Bank of Thailand at a special policy meeting over the weekend weighed on the baht, with the currency declining 1.4% to its weakest since November 2018.
The Malaysian ringgit slipped for an eighth straight session, declining 0.3% to a three-year low amid a two-week partial lockdown in the country.
Malaysia deployed its army to enforce the curb on travel, while its prime minister said the government might consider extending movement restrictions by up to two weeks.
The onshore Indonesian rupiah sank to its weakest since the depths of the Asian financial crisis in June 1998.
Jakarta's governor on Friday declared a state of emergency for the next two weeks, while health experts have warned that Southeast Asia's largest economy likely faces a surge in virus cases.
"Indonesia was always going to be more susceptible in the scramble for USD liquidity as the unwind of carry trades has resulted in a dramatic weakness in IDR and with the current account deficit already at worrying levels, the situation will only get worse," Saxo Capital's Sethuraman said.
Foreigners had sold $4.8 million worth of Indonesian government bonds this month by March 18, according to finance ministry data.