Emerging Asian shares were on track for their steepest monthly fall since the global financial crisis, and currencies wallowed around multi-year lows as the US-Israel war on Iran kept oil prices above $100 a barrel and deepened pressure on energy-importing economies.
The MSCI gauge of emerging Asian equities slumped 14 percent in a turbulent March, its biggest monthly loss since October 2008 at the height of the crisis.
The broader MSCI emerging markets index was set for its steepest monthly loss in six years, down more than 13 percent.
South Korea’s KOSPI index lost 19.1 percent in March, its worst monthly decline since October 2008, and the won sank to a 17-year low of 1,536.30 per dollar. The currency was also the worst regional performer in the first quarter of the year.
Related
Meanwhile, the Indonesian rupiah touched a new lifetime low of 16,998 on Tuesday, but stopped just short of breaching the key 17,000 per dollar level.
“If oil prices are $30-$35 a barrel higher, it means that the balance of payments fundamentals for a lot of currencies in Asia have meaningfully shifted, and that requires an adjustment higher in the FX levels of these currencies,” said Abbas Keshvani, Asia macro strategist at RBC Capital Markets.
“Dollar demands have gone up across the board for most of Asia, and this is going to be a slow bleed for a lot of these energy-importer currencies.”
The MSCI EM currencies index has lost about 3 percent in March, its worst month since September 2022.
