Asian currencies slide

Asian currencies were battered on Friday as investors dumped stocks amid the financial turmoil despite a round of global interest rate cuts, prompting dollar-selling intervention in South Korea, Indonesia and India. The Indonesian rupiah fell as far as 9,750 per dollar, down about 1.6 percent from Thursday's close, as trader cited dollar-selling intervention by the central bank to support the local currency.
"The action keeps players sidelined," said a trader in Jakarta. The South Korean won moved wildly, gaining over 12 percent to 1,224.9 per dollar at one point after falling sharply earlier, as the authorities were seen selling dollars to defend the won, which has lost 27 percent against the dollar this year.
A wave of selling pounded Asian shares amid growing fears of the financial turmoil, with the MSCI index of Asia-Pacific stocks excluding Japan falling 7.7 percent to its lowest since January 2005. The Indian rupee hit a record low at 49.25 per dollar, as the central bank said it would cut bank's cash reserve requirements to 7.5 percent to ease a liquidity crunch.
Meanwhile, the Singapore dollar fell to 1.4865 per US dollar, giving up its early gains as investors turned bearish on data showing the economy is in recession. "It's due to the GDP figure," said a trader in Singapore. The Sing dollar briefly rose to 1.4724 immediately after the central bank announced an easing in monetary policy.
Some traders said suspected official intervention helped the local unit. Singapore's central bank, which sets policy by managing the Singapore dollar in a secret trade-weighted band against a basket of currencies, eased monetary policy for the first time in five years after its economy sank into recession.
The central bank said on Friday it was shifting policy from a gradual appreciation bias to a neutral zero-appreciation bias for the trade-weighted currency, in response to slowing growth and expected easing in inflation. The central bank maintained the width of the secretive band.
The Philippine peso lost almost 0.9 percent to 47.8 per dollar, while the Thai baht was down 0.4 percent to 34.48 per dollar. "We see some interest selling from exporters and some from offshore," said a trader in Bangkok. "The bias is that the dollar should go up against the baht, like dollar/regionals."
Markets in Taiwan are closed for a holiday. Meanwhile, the cost of dollar funding remained elevated in Asia on Friday, with overnight dollar funds quoted between 4 and 7 percent in Singapore, 4.5-5.8 percent in Bangkok and 4-5 percent in Jakarta, traders said.
The levels held largely steady from Thursday, when several Asian central banks joined a world-wide rate-cutting campaign to contain the global financial crisis that has forced commercial banks to hoard cash, rather than lend to each other.