Rupiah leads dip as investors cut positions

ASIAN CURRENCIES ROUND-UP

Asian currencies declined, led by the Indonesian rupiah, on speculation that investors are cutting holdings in the region as signs mount that the US economy is slowing.

The rupiah fell to a one-year low and the South Korean won slipped to its weakest in a month, joining declines in stocks, as reports on August 3 showed US employers added fewer jobs in July and service industries growth slowed. The US is the second-biggest buyer of Indonesia's and South Korean exports.

"We're seeing markets pare risk in Asia, feeding into lower Asian currencies," said Steven Chang, global markets vice president at State

Street Bank & Trust Co in Hong Kong. "There's problems in the US."

The rupiah weakened 0.3 per cent to 9,301 a dollar as of 4 pm local time, according to data compiled by Bloomberg. The South Korean won fell 0.1 per cent to 923.40, according to Seoul Money Brokerage Services. It may decline to 930 this week, said Chang.

The won is extending two weeks of losses as the Bank of Korea and government seek to stem gains in the currency to protect profits of exporters, who contribute 40 per cent to the economy.

The central bank on August 3 said it will restrict companies from borrowing in foreign currencies, while Finance Minister Kwon Okyu said August 1 the authorities will take action to curb gains in the currency when necessary.

In Indonesia, the government isn't worried about the rupiah's decline, Finance Minister Sri Mulyani Indrawati said August 1. The currency is the worst performing among 10 of Asia's most-traded, down 3.3 per cent this year.

Elsewhere, the Taiwan dollar fell 0.1 per cent to NT$32.888. The Malaysian ringgit slipped 0.2 per cent to 3.4675 and the Vietnam dong was at 16,157 per dollar. The Singapore dollar was at S$1.5162 against the US dollar.

The Thai baht declined 0.1 per cent to 33.88 as Deputy Prime Minister Kosit Panpiemras said the government may hold off new currency measures as long as the baht is stable.

The baht reached its highest against the dollar in almost 10 years in onshore trading last month, prompting the government to introduce measures to weaken it.