March 25, 2020 / 6:15 AM / 4 days ago

EM ASIA FX-South Korean won gains over 1%, most others subdued on persistent virus worries

    * South Korean won at over 1-week high
    * Volatility likely as long as virus does not peak - analyst
    * Malaysian ringgit strengthens 

 (Adds text, updates prices)
    By Shriya Ramakrishnan
    March 25 (Reuters) - South Korea's won rose sharply on
Wednesday after domestic policy measures to boost dollar
liquidity helped ease credit concerns, while most other Asian
currencies were range bound amid lingering concerns related to
the coronavirus outbreak.
    Tracking sharp gains in local equity markets, the won
advanced as much as 1.8% to 1,227 against the greenback, its
strongest level in more than a week.
    The South Korean government said it will further loosen key
capital flow rules temporarily to encourage local financial
institutions to supply more dollars, while the central bank also
plans to inject dollars into markets this week using a currency
swap with the U.S. Federal Reserve.
    While the dollar pulled back sharply from recent peaks, the
risk-on mood across the region was subdued as more countries
adopted stringent measures and imposed lockdowns in a bid to
step up virus containment efforts.
    "To some extent, we are probably closer to a market bottom
than before and it is likely that some of the overshoots in USD
and excessive rise in bond yields correct lower at some stage,"
Christopher Wong, senior FX strategist at Maybank Singapore
    "That said it is not all hunky dory out there and markets
are likely to stay volatile for as long as coronavirus does not
peak and the virus spread is faster than policy responses." 
    India ordered a lockdown for the next three weeks, while
Thailand will be in emergency mode from Thursday for a month to
deal with the pandemic.
    The Thai baht weakened as much as 0.3% during the
session before paring some losses.
     The Chinese yuan eased slightly, while the
Philippine peso weakened 0.7%, its worst intraday
performance in more than a week. 
    The Singapore dollar wavered between positive and
negative territory. Markets will now focus on the release of
first-quarter preliminary growth figures, new stimulus measures
and the central bank's policy decision on Thursday.
    Meanwhile, the Malaysian ringgit strengthened 1% to
4.385 per dollar. 
    Bank Negara Malaysia said the central bank has enough
liquidity to ease financial strains and support intermediation
activities, while it will continue to supply daily ringgit
liquidity to banks via various tools under its open market
    The Malaysian government extended a two-week virtual
lockdown to April 14 and is also set to announce a comprehensive
people-oriented economic stimulus package on Friday.

    Financial markets in India and Indonesia were closed for a

  Change on the day at                                   
        0526 GMT                                   
  Currency                   Latest bid  Previous     Pct
                                              day    Move
  Japan yen              111.380           111.21   -0.15
  Sing dlr               1.446             1.4462   +0.01
  Taiwan dlr             30.291            30.316   +0.08
  Korean won             1229.400          1249.6   +1.64
  Baht                   32.800             32.79   -0.03
  Peso                   51.215             50.86   -0.69
  Ringgit                4.385              4.428   +0.98
  Yuan                   7.071             7.0620   -0.12
  Change so far in 2020                                  
  Currency               Latest bid      End 2019     Pct
  Japan yen              111.380           108.61   -2.49
  Sing dlr               1.446             1.3444   -7.03
  Taiwan dlr             30.291            30.106   -0.61
  Korean won             1229.400         1156.40   -5.94
  Baht                   32.800             29.91   -8.81
  Peso                   51.215             50.65   -1.10
  Ringgit                4.385             4.0890   -6.75
  Yuan                   7.071             6.9632   -1.52
 (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by
Shounak Dasgupta)
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