Currencies in Asia enjoy a good weekAsian currencies had their biggest weekly gains in 10 months last week after Federal Reserve Chairman Ben S. Bernanke eased concerns about a tapering off of economic stimulus that has fueled fund flows to emerging markets.
The Bloomberg-JPMorgan Asia Dollar Index rose 0.5 percent this week after Bernanke said July 10 that a “highly accommodative” monetary policy will be needed for the “foreseeable future.” The gauge has lost 1.2 percent since May 22, when the Fed indicated its bond buying could be tapered off.
The won led gains, completing its biggest weekly advance in five months as the Bank of Korea boosted the nation’s 2013 growth projection to 2.8 percent from an April estimate of 2.6 percent.
“Bernanke’s comments were a big support for risk sentiment this week,” said Pareena Phuangsiri, a Bangkok-based analyst at Kasikornbank. “But the basic trend remains for dollar strength on concern about the Fed’s tapering.”
The won advanced 1.6 percent this week, the biggest gain since the period ended Feb. 15, to 1,124.47 per dollar Friday in Seoul, according to data compiled by Bloomberg.
Minutes of the Federal Open Market Committee’s June meeting that were released this week showed policy makers want to see more signs U.S. employment is picking up before tapering off $85 billion a month of asset purchases.
The Bank of Korea left its benchmark interest rate at 2.5 percent for a second month on July 11 after a surprise cut in May. That stimulus, together with an extra budget of 17.3 trillion won ($15.4 billion), have boosted the growth outlook, Governor Kim Choong-soo said the same day.
India’s rupee advanced 1 percent this week to 59.6300 per dollar. The ringgit touched a three-week high of 3.1533 on July 11 as Bank Negara Malaysia held its overnight policy rate at 3 percent.
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