Asian forex: Most units plummet as investors scramble for dollars, dump bonds

Most emerging Asian currencies fell sharply on Thursday, with the South Korean won hitting its lowest in nearly 11 years, as investors scrambled to stock up on dollars and sold off bond holdings in a bid to stay liquid in unstable market conditions.
Central banks in emerging economies from Brazil to India have stepped in this week with bond purchases and stock market regulations to halt a deepening rout as the coronavirus outbreak sends global economic activity to a standstill.
Stocks, gold, commodities, and developed and emerging market bonds were all sold off as companies and brokers rushed to retain hard cash in hand to fund operations.
The rush for dollars, the most widely traded currency in global commerce, has led to a surge in the greenback's strength - an added hit to Asian emerging market currencies.
"If cash is king, then dollar cash currently is world president," Chris Turner, head of FX strategy at ING in London, wrote in a note.
"Everything that could be sold was sold against the dollar.
We'd be foolish to argue that this can turn around anytime soon - perhaps not until new COVID-19 cases start to slow."
The won slid 4% to 1,296 against the dollar, its weakest since July 2009.
The country's finance ministry and central bank issued a joint verbal warning against speculation on the currency market as the won dropped.
"The herd-like behaviour (in the currency market) is excessive, given S. Korea's (solid) fundamentals," said a finance ministry official reading a joint statement from the finance ministry and the Bank of Korea.
Meanwhile, the central bank was suspected of selling dollars in morning trade to slow the won's declines, according to two local currency dealers.
Indonesia, whose high-yielding markets have significant amounts of foreign investment, saw the offshore rupiah sink to its weakest since 1998 as its 10-year yields climbed a full percentage point in less than a month.
The local currency also fell sharply ahead of a central bank policy decision at 0700 GMT, where Bank Indonesia (BI) is expected to lower rates by 25 basis points, in what will be its fifth cut since May last year.
Taiwan's central bank is also likely to lower rates later in the day, while the Bangko Sentral ng Pilipinas delivered a bigger-than-expected 50 basis point cut to its overnight borrowing rate.
It is highly likely that central banks will continue their intervention to support credit markets constricted by the panic over the widening economic fallout from the outbreak, analysts said.
"Over the near-term, should the funding squeeze show no signs of abating, more central bank might join in the Fed's liquidity swaps to ensure sufficient dollar supply globally," said Han Tan, a market analyst at Cyprus based-FXTM.