Bloomberg News

Asian Currencies Pare Week’s Decline as Greece Bondholders Agree Debt Swap

March 09, 2012

Most Asian currencies pared this week’s losses after Greece secured agreement with 95.7 percent of bondholders for a debt swap and China’s inflation slowed.

The MSCI Asia-Pacific Index of stocks climbed 1.1 percent, capping its biggest two-day advance in two months. Consumer prices in China rose in February by the least since June 2010, providing scope for the central bank to ease monetary policy and support economic growth. Malaysia’s ringgit fell, after yesterday’s biggest rally in three weeks, ahead of an interest- rate decision.

“The optimism was priced into the market before the announcement and the announcement is a nice relief,” said Choong Yin Pheng, manager for economic and bond research at Hong Leong Bank Bhd. in Kuala Lumpur. “China is growing relatively strongly and people are hopeful for more supporting policies.”

India’s rupee appreciated 0.6 percent to 49.9869 per dollar as of 2:30 p.m. in Mumbai, limiting its weekly decline to 1 percent, according to data compiled by Bloomberg. Indonesia’s rupiah rose 0.1 percent to 9,135 per dollar, reducing the weekly loss to 0.6 percent. Taiwan’s dollar climbed 0.1 percent to NT$29.504 and was down 0.2 percent from March 2.

The Bloomberg-JPMorgan Asia Dollar Index (ADXY) climbed as much as 0.1 percent earlier and was last little changed at 117.35, halting a three-week advance. The index’s 60-day historical volatility dropped to 3.35 percent, the lowest measure of price swings since August, signaling reduced market uncertainty.

Yuan Gains

Bondholders tendered 152 billion euros ($201 billion) of Greek-law bonds, or 85.8 percent, after the government offered to swap their holdings for new securities. Another 20 billion euros of foreign-law bonds were also tendered, the finance ministry said in an e-mailed statement today.

The Greek government will activate so-called collective action clauses to achieve full participation from holders of Greek-law bonds, a move that Standard Chartered Plc said is “highly likely” to trigger payouts on credit-default swaps.

China’s yuan gained the most this month after data showed consumer prices rose 3.2 percent in February from a year earlier, less than the 3.4 percent estimate of economists in a Bloomberg News survey. The currency climbed 0.09 percent to 6.3107 per dollar, paring this week’s loss to 0.2 percent, according to the China Foreign Exchange Trade System.

“Easing inflation is good news for China’s economy as it means more room for policy easing,” said Daniel Chan, chief economist at BWC Capital Markets in Hong Kong. “Expectations that Greece could restructure its debt lifted the yuan.”

Policy Rates

Malaysia’s ringgit slipped 0.1 percent to 3.0080 per dollar before today’s policy meeting. Nineteen of 20 economists surveyed by Bloomberg forecast the central bank will keep the benchmark overnight rate at 3 percent. One predicted a cut to 2.75 percent. The decision is due at 6 p.m. in Kuala Lumpur.

The Bank of Korea left its seven-day repurchase rate on hold for a ninth straight month at 3.25 percent yesterday, while Bank Indonesia kept its reference rate at 5.75 percent.

South Korea’s won closed the week 0.2 percent lower at 1,117.90, while the Philippine peso strengthened 0.3 percent 42.585. Vietnam’s dong was little changed today and climbed 1 percent to 20,830 in the five-day period. Thailand’s baht dropped 0.2 percent today and from a week ago to 30.59.

To contact the reporters on this story: David Yong in Singapore at

To contact the editor responsible for this story: Sandy Hendry at

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