The South Korean won fell almost 3 per cent on Tuesday, leading Asian currencies lower as investors sold stocks amid renewed fears of a global downturn despite efforts to contain the financial turmoil. The won dropped as far as 1,299.9 per dollar as foreign investors sold South Korean stocks and as the rising cost of dollar funding in the local swaps market weighed on sentiment.
Foreigners dumped $3.6 billion in South Korean shares in the 4 weeks ended on Tuesday, followed by the sale of $3.3 billion in Taiwan and $2.9 billion in India, according to Nomura. South Korea's foreign exchange reserves fell by $27.4 billion in October, due mainly to the country injecting dollars into its banking system.
The Korean authorities, along with central banks in India, Indonesia and Philippines, have routinely intervened in the market to support their ailing currencies. The Indonesian rupiah fell 1.8 percent to 11,100 per dollar, while the Philippine peso lost 0.8 percent to 48.89 per dollar. "I think the peso is led by the move in the equity market," said a trader in Manila. The MSCI index tracking Asian shares excluding Japan fell 1 percent, snapping a five-day winning streak.
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