Oct. 26 (Bloomberg) -- Asian currencies fell, led by South Korea’s won, as investors spurned higher-yielding emerging- market assets on concern European leaders will be unable to agree how to fix their debt crisis at a summit today.
While heads of state will meet as planned, a European Union finance ministers’ meeting was canceled as the issue of how to recapitalize banks can’t be decided before other elements of the rescue package, a person familiar with the matter said. Chinese Premier Wen Jiabao said yesterday his government may adjust policies to protect growth, an indication the pace of yuan appreciation may slow.
“Concern that Europe’s summit results may not meet expectations is growing ahead of the meeting,” said Byeon Ji Young, a Seoul-based currency analyst at Woori Futures Co. “Investors will refrain from taking strong positions.”
The won dropped 0.3 percent to 1,132.45 per dollar as of the close of trade, according to data compiled by Bloomberg. The rupiah weakened 0.2 percent to 8,873 and the Philippine peso fell 0.2 percent to 43.202. Taiwan’s dollar was little changed at NT$30.125.
The rupiah slipped on speculation importers are boosting dollar purchases to pay month-end bills. Import growth accelerated to 32.1 percent in September from a year earlier after an increase of 23.7 percent the previous month, according to the median forecast of economists in a Bloomberg survey before official data due Nov. 1.
China Growth Concern
“Demand for dollars from importers typically grows toward the end of the month,” said Hideki Hayashi, a researcher at the Japan Center for Economic Research in Tokyo. “Indonesia’s imports are increasing, reflecting solid domestic demand, and so there will be more demand for dollars.”
China’s yuan forwards reversed earlier losses to trade at 6.3880 on speculation policy makers will ease monetary policy to safeguard the economic expansion and allow more currency gains to curb rising consumer prices.
“Officials have signaled intention to protect economic growth and that boosted investor confidence in the yuan,” said Banny Lam, a Hong Kong-based economist at CCB International Securities Ltd., a unit of China’s second-largest lender. “Besides, there’s still a need for China to tackle inflation with a stronger currency to lower import prices.”
The Taiwan dollar snapped a two-day gain before a government report on Oct. 31 that will show the island’s gross domestic product increased 3.6 percent in the third quarter, the slowest pace in two years, according to the median estimate of economists surveyed by Bloomberg.
Elsewhere, Thailand’s baht climbed 0.2 percent to 30.80 per dollar. Onshore financial markets in Singapore, Malaysia and India are closed today for the Hindu Deepavali holiday.
--With assistance from Yumi Teso in Bangkok. Editors: Andrew Janes, Simon Harvey
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