Asian currencies continue downward path

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http://www.businesstimes.com.sg/premium/singapore-markets/others/will-2014-see-end-regional-currency-woes-20140224

Since the middle of last year, Asian currencies have been on a downward path, with emerging market nations, namely India, Indonesia, Malaysia, the Philippines and Thailand, unable to solve their domestic problems which include persistently high inflation, large current account deficits and political governance issues.

Investors would be concerned about increasing capital outflows from these markets if the Fed's quantitative easing (QE) tapering picks up pace this year, leading to higher interest rates in the US and investors discarding risky emerging market assets in favour of safe havens.

The currencies' poor performance in 2013 saw Indonesia's rupiah depreciating the most, 26.3 per cent weaker by year-end, relative to the greenback.

The Indian rupee fell 12.9 per cent, amid a very volatile Q3 last year when the currency collapsed 26.4 per cent against the US dollar at one stage.

Malaysia's ringgit dropped 7.3 per cent, while Thailand's baht and the Philippine peso also fell 6.9 per cent and 8.0 per cent respectively.

So, will 2014 mark the end of regional currency woes?