Bloomberg: Won, Rupiah, Rupee to lead Asian gains
Very interesting article from Bloomberg. SCB believes that Indonesia, India, and Korea will weather the storm. Click here to read full article
Won, Rupiah, Rupee to Lead Asian Gains, Standard Chartered Says
By Patricia Lui
Nov. 12 (Bloomberg) — South Korea’s won, Indonesia’s rupiah and India’s rupee are likely to lead regional gains through the first half of 2009 as cheaper oil and government stimulus plans spur growth, according to Standard Chartered Plc.
The currencies, Asia’s worst performers this year, stand to benefit most from falling fuel bills and more public spending as their economies are more reliant on domestic demand than their regional peers, the bank said. It predicts an 18 percent gain in the won, a 6.9 percent advance in the rupiah and a 3 percent rise in the rupee.
The won and the rupee “may see further weakness near term but they should not be that far off their cyclical lows,” said Callum Henderson, head of foreign-exchange strategy at Standard Chartered in Singapore. “Indonesia’s story is relatively constructive and it also has less export exposure.”
Export-oriented economies such as Singapore, Malaysia and Taiwan, which stand to be hardest hit as demand collapses in the U.S. and Europe, will see their currencies perform worst in coming months, the bank said. The Singapore dollar, Malaysian ringgit and Taiwan dollar are forecast to weaken at least 2.5 percent through June.
The won recently traded at 1,359.50 per dollar, having tumbled 31 percent this year. The currency will climb to 1,150 by the middle of 2009, according to a Nov. 5 research note published by Standard Chartered, a U.K. bank that gets most of its profit from Asia.
The rupiah will strengthen to 10,800 from 11,540 and the rupee to 47.25 from 48.69, the bank forecast. The currencies have both slumped 19 percent this year.
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