2013.06.1500:51:19UTC+00Asian currencies in weekly decline as fed easing curbs spook markets

Asian currencies pulled back, with India’s rupee reaching a record low, on concern U.S. policy makers will pare stimulus that has driven inflows to emerging markets.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies, gave up 0.2 percent to 116.74 and was 0.7 percent off a nine-month low touched June 11. Bets that the Federal Reserve will cut bond purchases triggered record outflows of $14.4 billion from global bond funds in the week to June 12 and $8.5 billion from equities, a Citigroup Inc. report said citing EPFR data. The MSCI Asia Pacific Index of stocks rose yesterday after displaying its largest decline in three weeks on June 13 as the World Bank cut global growth estimates.

Currency Intervention

Losses in regional currencies have forced central banks from India to Thailand and Indonesia to step in to defend their exchange rates.

World Bank

The World Bank lowered its 2013 global growth forecast to 2.2 percent from 2.4 percent this week, saying a “recovery remains hesitant and uneven.”

‘Doing Terribly’

“The peso has been doing terribly as the stock market has dropped,” said Leong Sook Mei, Southeast Asian head of global markets research at Bank of Tokyo-Mitsubishi UFJ Ltd. in Singapore. “There is no need for rate cuts when the peso is weakening and the economy is Asia’s best-performing.”

Elsewhere in Asia, Malaysia’s ringgit dropped 0.6 percent for the week to 3.1149 per dollar, Indonesia’s rupiah gave up 0.7 percent to 9,873 and Taiwan’s dollar weakened 0.3 percent to NT$29.97. The Vietnamese dong boosted 0.1 percent to 21,003, while the Chinese yuan slightly move at 6.1308.