South Korea’s Won Leads Decline in Asian Currencies on Rising Oil Prices in Online forex trade


South Korea’s won and the Malaysian ringgit led declines in Asian currencies in Online forex trade, on concern rising oil prices will cool global economic growth and reduce demand for the region’s exports.

South Korea’s won and the Malaysian ringgit led declines in Asian currencies in Online forex trade, on concern rising oil prices will cool global economic growth and reduce demand for the region’s exports.

Crude rose to a 29-month high and the MSCI Asia-Pacific Index of shares dropped for the first time in three days on speculation investors will slow purchases of higher-yielding emerging-market assets. A government report today showed Taiwan’s trade balance shrank to $920 million in February, from $1.9 billion the previous month.

The won declined 0.4 percent to 1,119.30 per dollar as of 3 p.m. in Seoul, according to data compiled by Bloomberg. The ringgit fell 0.2 percent to 3.0315 and the Philippine peso weakened 0.1 percent to 43.295.

The won retreated from a two-week high on concern South Korea’s trade balance will deteriorate as unrest in the Middle East drives oil costs higher and China’s plan to stem inflation hurts overseas shipments. South Korea is Asia’s fourth-largest importer of crude and China is the country’s biggest export market. Premier Wen Jiabao told the annual National People’s Congress in Beijing over the weekend that reining in inflation is the nation’s top priority.

South Korea said price stability is the nation’s policy priority during the first half and economic growth may slow because of the surge in oil and an outbreak of foot-and-mouth disease.
The climb in other global raw-material prices and China’s monetary-policy tightening are further risks for the economy, the Ministry of Strategy and Finance said in a statement today.

The Bank of Korea may boost its benchmark interest rate to 3 percent from the current 2.75 percent on March 10, according to all of 14 economists surveyed by Bloomberg News.

The ringgit slipped from near a 13-year high on speculation the central bank will leave borrowing costs unchanged this week to support growth as higher oil prices threaten to stoke inflation.

Bank Negara Malaysia will keep its overnight rate at 2.75 percent when it meets on March 11, according to eight of 12 economists in a Bloomberg News survey. Four predicted an increase to 3 percent. The currency snapped a two-day gain after oil extended a three-week rally, putting pressure on the government’s budget deficit.