Most emerging Asian currencies slid on Monday as a radical bailout plan for Cyprus reignited worries about the euro zone's debt crisis and prompted investors to dump riskier assets. The ringgit weakened to its lowest since August last year, breaching a chart support, while the won touched a five-month low on foreigners' continuous stock selling.
The Singapore dollar slid as worse-than-expected export data reinforced worries about a slowdown in the city-state's economy. The Philippine peso eased as investors booked profits. Euro zone finance ministers want to tap Cyprus' savers in order for the country to receive a 10 billion euro ($13 billion) bailout, and announcement of this decision on Saturday caused a run on cash.
"While EZ policy-makers have stressed that Cyprus is an exceptional case, that will probably do little to calm sentiments. 'Better safe than sorry' may be the mantra," Mizuho Corporate Bank said in a note, referring to the euro zone. "It is better to hold dollar long positions. The European situation is not good. Will it set off a bank run in Italy and Portugal later?" said a senior Malaysian bank trader in Kuala Lumpur.
The won touched 1,117.2 to the dollar, its softest since October 11, on offers by offshore funds and as foreign investors continued to dump Seoul shares. Goldman Sachs said the won has room to depreciate if the yen weakens further, mostly on domestic easing policy rather than the global recovery, although it maintains a positive view on the won.
The ringgit hit 3.1390 per dollar, its weakest since August 3, according to Thomson Reuters data, weakening past the 61.8 percent Fibonacci retracement at 3.1275 of its appreciation between June and January. The Singapore dollar fell after data showed the island's non-oil domestic exports in February plunged 30.6 percent from a year earlier. The peso has gained about 0.8 percent against the dollar this year, according to Thomson Reuters data, on inflows to the country's stocks and bonds fuelled by strong economic fundamentals and hopes for a ratings upgrade.