By David Yong Nov. 9 (Bloomberg) -- Asian currencies rose, led by Malaysia’s ringgit and the Indonesian rupiah, on speculation low U.S. interest rates and a pledge by the Group of 20 to keep stimulus measures will draw investors to higher-yielding assets. The International Monetary Fund signaled over the weekend that borrowing costs in the U.S., which stand at zero to 0.25 percent, are being used to fund so-called “carry trades.” The rupiah and ringgit reached the highest levels in at least two weeks after the U.S. on Nov. 6 reported it highest jobless rate since 1983, helping deter the Federal Reserve from tightening monetary policy. “With the high unemployment rate in the U.S., expectations of any Fed hike are being pushed back, which is helping risk appetite and equities,” said Gerrard Katz, head of currency trading at Standard Chartered Plc in Hong Kong. “There’s a huge amount of liquidity in the market that needs to be invested.” The ringgit rose 0.6 percent to 3.3820 per dollar as of 11:27 a.m. in Kuala Lumpur and reached 3.3785, the strongest level since Oct. 27, according to data compiled by Bloomberg. The won appreciated 0.5 percent to 1,161.25 in Seoul and touched 1,160.92, the highest since Oct. 16. The rupiah gained 0.5 percent to 9,410. The U.S. currency is still “on the strong side” in real effective terms, even as it moves closer to medium-term equilibrium, according to a report from the IMF on Nov. 7. The G-20 nations didn’t comment on the dollar’s slump after a meeting in Scotland, where they agreed that stimulus policies will remain until a recovery is assured. Carry Trades The dollar has dropped against all but one of its 16 major counterparts in the past six months as investors increased carry trades, where they borrow in countries with low interest rates to invest in higher-yielding assets. Analysts predict that borrowing costs in Malaysia and Indonesia, currently 2 percent and 6.5 percent, will rise in the second quarter of next year, according to surveys conducted by Bloomberg News. Rates in Korea and the Philippines may increase in the first three months of 2010. “Any tightening in policy will have to come from currency gains if stimulus measures are maintained,” said Suresh Kumar Ramanathan, a foreign-exchange strategist at CIMB Investment Bank Bhd. in Kuala Lumpur. “This works in favor of Asia versus the dollar.” The dollar fell to $1.4910 per euro in Tokyo from $1.4847 in New York on Nov. 6 and reached $1.4915, approaching its weakest level since Oct. 27. The greenback climbed to 90.19 yen versus 89.88 at the end of last week. Asian Equities The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-traded currencies excluding the yen, was headed for its highest close in three weeks. The MSCI Asia-Pacific Index of local equities climbed for a second day. In South Korea, overseas investors have bought $21.3 billion more of the nation’s shares than they sold so far this year, driving an 8.4 percent gain in the currency. Funds have put almost $11 billion into Taiwan shares. Taiwan’s dollar gained 0.4 percent today and reached a two- week high of NT$32.368 per dollar in Taipei. Elsewhere, the Philippine peso climbed 0.4 percent to 47.025 and the Thai baht advanced to 33.34 from 33.37 on Nov. 6. Singapore’s dollar rose 0.2 percent to S$1.3887 and China’s yuan was little changed at 6.8271. “The U.S. may have low interest rates for a while,” said Yang Kung-Yi, a foreign-exchange trader in Taipei at Shanghai Commercial & Savings Bank. “Investors will be buying other currencies against the dollar” including Taiwan’s.

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