* Most currencies see muted trading
* Indian rupee slides to weakest in 7 weeks
* Malaysian ringgit slightly stronger
(Adds details on Indian rupee, context, updates prices)
By Ambar Warrick
Feb. 4 (Reuters) – The Indian rupee skidded against the
dollar on Monday, while most other Asian currencies edged down
in muted trade as the Chinese Lunar New Year holidays kept
volumes low.
Many of the regional currencies were unable to shake off
Friday’s losses after China’s factory activity contracted the
most in almost three years, further fuelling concerns about
demand from Asia’s largest economy.
However, the market holidays in the region saw very tight
trading ranges.
The Indian rupee was an exception, losing about 0.6
percent on the dollar to its weakest level since mid-December.
Much of the pressure on the rupee has come from concerns about
the country’s budget deficit after the government delivered a
voter-friendly interim budget on Friday.
Economists warned Prime Minister Narendra Modi’s
pre-election budget, which includes handouts for farmers and tax
cuts for the lower middle class, is likely to weigh on whoever
forms the next administration.
“In a nutshell, negative investor reactions dominated in the
face of more optimistic than expected revenue projections and
higher than expected borrowing plans, fuelling fiscal slippage
concerns,” OCBC said in a research note.
An uptick in oil prices also weighed on the rupee, owing to
India’s large fuel bill.
The oil price impact was also seen on the Indonesian rupiah
, which was off 0.36 percent to the dollar. Southeast
Asia’s biggest economy imports a sizable quantity of fuel.
Going in the other direction was the Malaysian ringgit
, up slightly on the dollar. The country exports petroleum
products so higher oil prices generally support its currency.
Malaysian markets had shortened trading hours for the day.
The Singapore dollar inched about 0.2 percent lower
against the greenback. Markets in the city state, which also
shut off on a shortened trading session for the day, will be
closed for the Lunar new year holidays on Tuesday and Wednesday.
The Chinese yuan, South Korean won,
Taiwan dollar did not trade due to the market holidays.
The following table shows rates for Asian currencies against
the dollar at 0414 GMT.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0414 GMT
Currency Latest bid Previous day Pct Move
Japan yen 109.610 109.48 -0.12
Sing dlr 1.352 1.3498 -0.19
Baht 31.330 31.27 -0.19
Peso 52.340 52.26 -0.15
Rupiah 13980.000 13935 -0.32
Rupee 71.645 71.24 -0.57
Ringgit 4.090 4.094 +0.10
Change so far in 2019
Currency Latest bid End 2018 Pct Move
Japan yen 109.610 109.56 -0.05
Sing dlr 1.352 1.3627 +0.76
Baht 31.330 32.55 +3.89
Peso 52.340 52.47 +0.25
Rupiah 13980.000 14375 +2.83
Rupee 71.645 69.77 -2.62
Ringgit 4.090 4.1300 +0.98
(Reporting by Ambar Warrick in Bengaluru
Editing by Shri Navaratnam)
