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HONG
KONG—The South Korean won led declines among Asian
currencies on concern the country’s trade deficit will
continue to widen as oil prices climbed to a record. The
Philippine peso and the Indonesian rupiah fell.
The won
slid to the lowest level in more than seven weeks after
crude oil rose to a record $122.73 a barrel in
New York.
It is the worst performer among the 10 most traded Asian
currencies outside of Japan this year, headed for a
sixth day of losses.
Korea
is a net importer of oil. The currency also declined as
the government signaled it wants a weaker won to spur
exports and growth.
“Oil
prices continue to grind higher toward record levels,
and that’s going to hit Korea’s trade balance,’’ said
Craig Chan, a currency strategist at Lehman Brothers
Holdings Inc. in Singapore. “We are negative on the
won.”
The won
fell as much as 0.8 percent to 1,022.95 a dollar before
trading at 1,021.75 as of early afternoon trading
Wednesday, according to Seoul Money Brokerage Services
Ltd. That’s the lowest since March 18. The rupiah
declined 0.1 percent to 9,228 per dollar.
South Korea’s
Finance Minister Kang Man Soo said the government should
pursue policies to drive economic growth.
The
rupiah fell to a one-week low on concern the nation’s
energy importers will need more dollars to purchase oil
as the commodity trades near a record high.
The
currency lost 1.6 percent in the past two months as
inflation in April accelerated to 9 percent, the fastest
in almost two years, on higher food and energy costs.
Indonesia is the sole net importer among the
Organization of Petroleum Exporting Countries’s 12
producing members.
“Higher
oil prices will lead to more imports,” said Tetsuo
Yoshikoshi, an analyst at Sumitomo Mitsui Banking Corp.
in Singapore. “That would naturally prompt a weaker
rupiah. People are worrying about higher inflation in
Indonesia. That would weaken consumption.”
The
local currency fell in
Jakarta
to 9,261 rupiah to a dollar, the lowest since April 30,
according to data compiled by Bloomberg. The rupiah may
extend losses to 9,300 rupiahs by the end of this month,
Yoshikoshi said.
President Susilo Bambang Yudhoyono said May 5 the
advance in crude-oil prices is forcing Indonesia’s
government to raise pump prices a year before elections.
Indonesia’s
government is aiming for economic growth of 6.4 percent
this year. Expansion may slow to 6.1 percent, according
to the median estimate of nine economists and analysts
surveyed by Bloomberg between March 7 and March 17.
The
Philippine peso declined for a second day on speculation
record oil prices will fan inflation already at a
three-year high.
The peso
traded near the lowest level in five months after the
government reported consumer prices in April rose 8.3
percent from a year earlier, exceeding the central
bank’s and economists’ estimates. The nation imports
almost all its oil requirements.
“There’s
negative sentiment that inflation is getting worse and
hurting the economy, affecting asset prices and the
peso,” said Rafael Algarra, treasurer at Security Bank
Corp. The currency dropped to P42.44 per dollar in
Manila from P42.28 Tuesday, according to the Bankers
Association of the Philippines.
Elsewhere, the Thai baht slipped to 31.77 per dollar.
The Malaysian ringgit was little changed at 3.1510
ringgits to a dollar. (Bloomberg) |
