Asian currencies completed a monthly decline, led by India’s rupee and the South Korean won, as investors slowed investment in emerging markets on concern Europe’s debt crisis will spread. The Bloomberg-JPMorgan Asia Dollar Index slumped 1.1 percent in November to 114.12 as of 4:47 p.m. in Hong Kong, the biggest monthly drop since May. The rupee lost 3.4 percent to 46.02 per dollar, South Korea’s won weakened 2.9 percent to 1,159.25 and the Philippine peso fell 2.2 percent to 44.01. “Everyone’s still paring back risk as there’s a lot of uncertainty in the world right now, mostly around funding and exposure to Spain and peripheral Europe,” said Stuart Oakley, the Singapore-based head of emerging markets foreign exchange for Asia at Royal Bank of Scotland Plc. “We are still seeing better buying of dollars right now.” Overseas investors were net sellers of equities this month in Indonesia, the Philippines and Thailand, according to exchange data. The euro fell toward a two-month low against the dollar on concern Europe’s banking crisis will spread as Spanish and Portuguese bonds slumped yesterday following an 85 billion euro ($111 billion) bailout for Ireland. The won posted its biggest monthly loss since May as military tension on the Korean peninsula curbed demand for South Korea’s assets. The currency reached 1,172.50 on Nov. 24, the weakest level since Sept. 9, the day after North Korea’s attack on the South’s Yeonpyeong island. Four people died in the shelling and President Lee Myung Bak said yesterday that Kim Jong Il’s regime will “be made to pay for any further provocation.” Slowing Growth “The European debt crisis is being highlighted again,” said Kim Jin Ju, a currency trader at Korea Exchange Bank in Seoul. “It’s a stronger dollar story. The geopolitical risk from North Korea may be subsiding, but it will trigger losses if we see another attack.” India’s rupee trimmed daily losses after a report showed its economy grew 8.9 percent in the third quarter from a year earlier. That was more than the 8.2 percent median estimate in a Bloomberg survey. The Philippine peso had its biggest monthly decline since May after a report last week showed growth slowed to a weaker- than-expected 6.5 percent in the third quarter from a year earlier, compared with an 8.2 percent expansion in the previous three months. Thailand’s baht declined this month as slowing economic growth reduced the need for higher interest rates and attempts to remove the Democrat party from power damped demand for the nation’s assets. The baht retreated 0.8 percent to 30.21. Charges Dismissed Thailand’s Constitutional Court yesterday dismissed charges the Democrat party misused state campaign funds, clearing one of two cases that may see Prime Minister Abhisit Vejjajiva become the third leader forced from office since the 2007 election. The Bank of Thailand will keep its benchmark interest rate at 1.75 percent tomorrow, refraining from raising borrowing costs for a second meeting, according to 12 of 17 economists surveyed by Bloomberg. Five forecast the rate will be lifted to 2 percent. “Investors are already risk averse due to Europe’s problems,” said Tohru Nishihama, an economist at Dai-ichi Life Research Institute Inc. in Tokyo. “Thailand also has political risk, making them stay away from Thai assets. In addition, the economy is slowing down and we won’t probably see any more rate hikes for the time being, further weighing on the baht.” Elsewhere, The Singapore dollar fell 1.7 percent this month to S$1.3205, Malaysia’s ringgit dropped 1.5 percent to 3.1660 and the Indonesian rupiah lost 1.1 percent to 9,034. Taiwan’s dollar weakened 0.2 percent to NT$30.85. To contact the reporters on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net; Patricia Lui at plui4@bloomberg.net To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net.

Source