Asian forex: Indian rupee plunges

The Indian rupee plummeted on Tuesday to a one-month low, before some of loss was pared, in the wake of the surprise resignation of the country's central bank governor. The rupee fell as much as 1.6 percent to 72.463 per dollar in early trade, but by 0505 GMT it had inched back to 72.245.
The governor of the Reserve Bank of India (RBI), Urjit Patel, resigned late on Monday, citing personal reasons, after a prolonged public spat over policy with the government.
Prime Minister Narendra Modi's government has been putting pressure on the RBI to ease lending curbs and capital requirements, and gain some of its capital reserves to help fund the fiscal deficit ahead of the national elections in May.
"The damage to the image of central bank independence is already done, as financial markets will likely price in that an RBI governor's shelf life partially depends on his/her willingness to accommodate the government's wishes," Hugo Erken, senior economist of Rabobank, said in a note.
Mizuho Bank, in a note said, said "Further rupee selling pressures could continue, until there is certainty on what the government intends to do with the RBI."
On Tuesday, other regional Asian currencies continued to weaken against the dollar as uncertainties of global growth continued to dampen sentiment.
"There is a plethora of factors fuelling nervousness in the market, including but not limited to worries about the US economy, said Mitul Kotecha, senior emerging markets strategist at TD Securities.
Tuesday's second biggest loser among regional currencies was the Indonesia rupiah, which fell 0.6 percent, even as the country's central bank said it would intervene in currency and bond markets to ensure it remains stable.
Also slipping against the dollar were the Korean won, the Philippine peso and the Malaysian ringgit.
Bucking Tuesday's trend, the Singapore dollar gained slightly on safe-haven buying.
The yuan rose 0.1 percent to 6.902 a dollar, edging away from the psychologically important 7 per dollar level.
The currency was lifted by news that Beijing and Washington are discussing the next steps in their trade talks, but its advance were likely be limited due to the dollar's gains over Brexit worries.
China announced on Tuesday that Vice Premier Liu He had spoken with US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer to move the talks forward.