SINGAPORE, Jan 20 — Most emerging Asian currencies slid today as continuous spiral in oil prices and a slowing global economy dampened risk sentiment.

The Hong Kong dollar fell to over eight-year low as China’s sluggish economy and a weak yuan currency dented the market sentiment.

South Korea’s won fell as foreign investors continued to sell both the currency and stocks.  Foreigners also sold Indonesia’s rupiah..

The Malaysian ringgit edged down as crude futures slumped again with US oil dropping to its lowest since September 2003 below US$28 (RM 122.31) a barrel.

That underscored concerns over Malaysia’s falling oil and gas revenues.

Regional stocks also lost ground with China’s equities down more than 1 per cent despite expectations that Beijing may take more stimulus possibly before the Lunar New Year holidays in early February. As risk sentiment soured, demand for a safe haven lifted the Japanese yen.

“Asian currencies will be caught by sliding oil and economic slowdown at least by the end of the first half,” said Yuna Park, currency and bond analyst, Dongbu Securities, Seoul.

“They are unlikely to find support from hopes on China’s stimulus. China may take steps only to reduce impact of restructuring on overcapacity,” Park added.

The International Monetary Fund cut its global growth forecasts for the third time in less than a year on a sharp slowdown in China trade and weak commodity prices.

China’s central bank yesterday announced it would inject more than 600 billion yuan (RM398.407 billion) into the banking system to help ease a liquidity squeeze expected before the Lunar New Year.

Such a move is usual before the holidays, and stopped well short of an actual cut in bank reserve requirement ratios, which would have freed banks to lend more.

Won

The won slid as South Korean stocks slumped nearly 3 per cent.

Foreign investors were set to unload Seoul shares in the main exchange for a 10^th straight session, the Korea Exchange data showed.

“Demand linked to yen/won was also suspected. The won is unlikely to rebound, given such a market force despite suspected intervention,” said a South Korean bank trader in Seoul.

Against the Japanese currency, the won lost up to 1.3 per cent to 10.3866.

South Korea’s foreign exchange authorities were suspected of supporting the worst-performing Asian currency so far this year, traders said.

Rupiah

Indonesia’s rupiah eased as foreign investors such as leveraged funds sold the currency in non-deliverable forwards markets.

Losses in the currency were limited as the government bond prices rose.

The country sold 14 trillion rupiah (RM4.368 billion) worth of bonds at an auction yesterday above the indicative target of 12 trillion rupiah, the finance ministry said. — Reuters