February 3, 2020 / 7:07 AM / 22 days ago

EM ASIA FX-Asian currencies weaken as virus worries pound yuan

    * Chinese yuan down 1.2%, past symbolic 7 per dollar
    * More than $420 bln wiped off Chinese equities benchmark
index
    * Indonesian rupiah's 0.6% tumble draws cenbank intervention

    By Rashmi Ashok
    Feb 3 (Reuters) - The yuan weakened over 1% in onshore trade
on Monday after Chinese markets reopened following an extended
Lunar New Year break, pulling down already bruised Asian
currencies as worries over the coronavirus outbreak cast a pall
over the region.
    Trading for the first time since Jan. 23, the onshore yuan
 shed 1.2% to trade at 7.019 against the dollar, the
weakest since Dec. 12, 2019, as the death toll in China from the
fast-spreading virus rose to 361 as of Sunday.
    In a show of support, China's central bank unexpectedly
lowered the interest rates on reverse repurchase agreements and
also injected a total of 1.2 trillion yuan ($173.81 billion)
into money markets on Monday.
    The measures, however, did little to assuage markets.
Investors shaved off about $420 billion from the benchmark
Shanghai Composite index, while yields on the country's
30-year government bonds fell.
    "The coordinated and pre-emptive measures by Beijing will go
a long way to soften the blow, but confidence remains fragile
amid high uncertainty," Lavanya Venkateswaran, economist at
Mizuho Bank's Asia & Oceania Treasury Department said.
    Knock-on effects from the yuan's dive and worries over the
outbreak hurting demand from China kept most regional units
under pressure.
    The Thai baht weakened 0.1%. The region's best
performer across the last two years, the currency has shed over
4% since the year began.
    Last week, the Thai Tourism Ministry warned that reduced
travel from China alone could result in 50 billion baht ($1.52
billion) of lost tourism revenue.
    The Malaysian ringgit eased 0.4% while the Taiwan
dollar and South Korean won lost about 0.3%
each against the dollar.
    Even the Indian rupee eased, despite data from a
private survey which showed manufacturing activity in the
country expanded at its quickest pace in nearly eight years in
January.
    The Indonesian rupiah tumbled nearly 0.6% to trade
at 13,725 against the dollar — weakest in nearly three weeks —
despite the central bank stepping in to support the currency.
    An official said Bank Indonesia was intervening in spot
foreign currency trading as well as domestic non-deliverable
forward and bond markets to stabilise the currency, whose fall
he attributed to the sudden drop in Chinese markets.

    So far this year, the currency is the region's best
performer and sole gainer, firming 1%, as a series of rate hikes
across 2018 to defend against capital outflows continue to lend
support.
    
The following table shows rates for Asian currencies against the
dollar at 0613 GMT.
    
    CURRENCIES VS U.S. DOLLAR 
    
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              108.480     108.38        -0.09
 Sing dlr               1.368       1.3648        -0.26
 Taiwan dlr             30.298      30.250        -0.16
 Korean won             1195.500    1191.8        -0.31
 Baht                   31.180      31.15         -0.10
 Peso                   50.980      51            +0.04
 Rupiah                 13725.000   13650         -0.55
 Rupee                  71.578      71.34         -0.33
 Ringgit                4.111       4.095         -0.39
 Yuan                   7.015       6.9368        -1.11
                                                  
 Change so far in 2020                            
 Currency               Latest bid  End 2019      Pct Move
 Japan yen              108.480     108.61        +0.12
 Sing dlr               1.368       1.3444        -1.75
 Taiwan dlr             30.298      30.106        -0.63
 Korean won             1195.500    1156.40       -3.27
 Baht                   31.180      29.91         -4.07
 Peso                   50.980      50.65         -0.65
 Rupiah                 13725.000   13880         +1.13
 Rupee                  71.578      71.38         -0.28
 Ringgit                4.111       4.0890        -0.54
 Yuan                   7.015       6.9632        -0.73
 

 (Reporting by Rashmi Ashok in Bengaluru; Editing by Shounak
Dasgupta)
  
 
 
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