Ringgit leads gains in Asian currencies

SINGAPORE/BANGKOK: Asian currencies rallied last week, led by Malaysia’s ringgit and the baht, after the Federal Reserve unexpectedly maintained monetary stimulus that has led to capital inflows to emerging markets.

Fed chairman Ben S. Bernanke said on Wednesday more evidence of a recovery in the world’s largest economy is needed before the central bank starts paring its $85 billion a month of bond purchases. Global funds bought $951 million more stocks than they sold last week in Indonesia, the Philippines and Thailand.

The ringgit strengthened 4% last week to 3.1650 per dollar in Kuala Lumpur, according to data compiled by Bloomberg. The baht appreciated 2.9% to 30.96 and the Indonesian rupiah gained 0.5% to 11,350.

The Malaysian currency posted its biggest weekly gain since the 1998 Asian financial crisis, helping the FTSE Bursa Malaysia KLCI Index of shares climb 1.8%. The US is Malaysia’s fourthlargest overseas market. Shipments rose in July after a fivemonth contraction.

‘‘We are building up our portfolio to come back to a long position on emerging currencies versus the dollar,’’ said Philippe Jauer, chief investment officer for global fixed income and currencies in Singapore at Amundi, which oversees about $1 trillion, said in an e-mail interview. ‘‘The Philippines, Malaysia and Thailand are the first countries any investor should come back to because the economic fundamentals are much better than in India and Indonesia.’’

The Reserve Bank of India unexpectedly raised its benchmark repurchase rate by a quarter percentage point to 7.5% on Friday, the first increase since 2011. Governor Raghuram Rajan, who took office two weeks ago, is seeking to rein in inflation that is hurting the poor and dimming economic prospects.

The rupee dropped 0.8% to 62.2775 in Mumbai, trimming the week’s gain to 1.9%. The S&P BSE Sensex Index of shares fell 1.9%, after climbing 4.6% in the previous four days.

The rupee and Indonesia’s rupiah have lost 12% and 15% this year against the dollar, respectively, as investors fled nations with worsening current-account deficits.

Elsewhere in Asia, the Philippine peso rose 1.9% last week to 43.037 per dollar. Vietnam’s dong traded at 21,115, unchanged from the end of the previous week. South Korea’s markets are shut for three days from Sept 18 for public holidays, while China and Taiwan are closed for two days from Sept 19. Hong Kong also had a public holiday on Friday.