Rupee leads Asia losses

singapore — India’s rupee led losses in Asian currencies last week as overseas investors cut holdings of the region’s stocks on speculation US policy makers will cut stimulus this year.

The Bloomberg-JPMorgan Asia Dollar Index fell 0.3 per cent in the five days through yesterday, after a 0.5 per cent drop in the prior period. Thirdquarter US expansion topped estimates and growth in service industries accelerated last month, data showed last week.

“Asian currencies declined [last] week as markets think the Fed will scale back its stimulus earlier than expected,” said Leong Sook Mei, Southeast Asian head of global markets research in Singapore at Bank of TokyoMitsubishi UFJ. “Flows are not coming back.”

The Indian rupee lost 1.2 per cent from November 1 to 62.475 per dollar in Mumbai, according to prices from local banks compiled by Indonesia’s rupiah weakened 0.7 per cent to 11,410, Thailand’s baht fell 0.9 per cent to 31.475 and Malaysia’s ringgit dropped 0.3 per cent to 3.1794.

Overseas funds sold $1 billion more South Korean, Thai, Indonesian and Philippine stocks than they bought this week, exchange data show. The rupee fell to a five-week low of 62.7513 on Friday. The Reserve Bank of India has cut direct dollar supplies to oil refiners by 30 per cent to 40 per cent, Economic Affairs Secretary Arvind Mayaram told CNBC TV-18.

“US dollar demand from local oil companies as the RBI scales back its FX swaps is likely to weaken the case for rupee strength,” Morgan Stanley analysts led by New York-based Rashique Rahman wrote in a report on November 7.

The rupiah had a second weekly decline after data showed gross domestic product rose 5.6 per cent last quarter from a year earlier, the slowest pace since 2009. The nation recorded trade deficits in seven of the first nine months of this year.

The baht touched a fourweek low of 31.515 per dollar on Friday on concern antigovernment protests triggered by a proposed amnesty law for political offenses will deepen a slowdown in Southeast Asia’s second-biggest economy.

Elsewhere in Asia, South Korea’s won dropped 0.4 per cent this week to 1,064.90 per dollar and the Taiwanese dollar slipped 0.1 per cent to NT$29.505. The Chinese yuan advanced 0.15 per cent to 6.0905, while the Philippine peso gained 0.1 per cent to 43.188. Vietnam’s dong was steady at 21,100. —