Asian currencies drop on expectations of lower growth

Posted August 9, 2008

Asian currencies saw their biggest declines against the dollar in more than two years on speculation that slowing global economic growth will curb demand for Asian-made consumer electronics.

by Aaron Pan and Patricia Lui, Bloomberg.com

Baltimore — (TFN): Asian currencies slumped this week, led by Singapore’s dollar, on concern slowing global growth will curb demand for the region’s assets. Singapore’s currency posted its biggest weekly loss in a decade after the Straits Times newspaper yesterday cited Finance Minister Tharman Shanmugaratnam as saying the economy is moving toward a slowdown and growth is unlikely to rebound “anytime soon.” Nine of the 10 most-active Asian currencies outside of Japan fell this week.

“Tharman’s dovish comments confirm expectations that the central bank won’t be seeking any further policy tightening,” said Emmanuel Ng, economist at Oversea-Chinese Banking Corp. in Singapore. “Second-quarter GDP and the full-year growth numbers also run the risk of being revised downwards at Prime Minister Lee’s speech later today.”

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