EM ASIA FX-Rupiah leads Asia FX slides on U.S. govt, Fed woes

Reuters

* Rupiah at 4-1/2-yr low on corporate dlr demand

* Won falls on offshore funds; foreigners keep buying stocks

* Ringgit down, supported at 3.24/dlr for now

(Adds text, updates prices)

By Jongwoo Cheon

Sept 25(Reuters) - The Indonesian rupiah fell 1 percent on

Wednesday, leading slides among emerging Asian currencies amid

concerns over a possible U.S. government shutdown and

uncertainty about the Federal Reserve's monetary policy outlook.

The rupiah weakened to as low as 11,580 per dollar,

matching Tuesday's low, which was the weakest since April 2009.

Increasing dollar demand from local companies for month-end

payments put pressure on the currency, though central bank

intervention curbed losses, traders said.

The South Korean won slid as offshore funds sold

it and on dollar demand from importers. The Malaysian ringgit

also weakened due to selling from offshore investors.

Regional stocks fell as Tea-Party backed U.S. Senators are

threatening to stall a bill to fund the U.S.

government.

Suresh Kumar Ramanathan, head of regional interest rate and

FX strategy at CIMB Investment Bank, said the Fed has

technically started to taper off stimulus since Monday.

On that day, the New York Fed said it accepted $11.81

billion in cash as part of the first test of a new reserve repo

tool that is meant to help control short-term interest rate.

"Markets are not aware of this, but Asia will now start

fretting," said Ramanathan in Kuala Lumpur.

"I expect much of Asian FX will be under pressure and

structurally weak economies will remain in trouble," he said,

adding the rupiah and the Indonesian rupee may suffer more.

Last week, most emerging Asian currencies rose after the

Fed's shock decision to maintain its bond-buying programme.

But regional units gave up some of the gains this week on

uncertainty over whether the U.S. central bank will start to

dial back stimulus later this year.

WON

The won fell as offshore funds cut bullish bets in the South

Korean currency and on weaker Seoul shares.

Selling from offshore funds came amid increased caution that

the foreign exchange authorities may not allow the won to

strengthen past 1,070 per dollar. The authorities had been

recently spotted intervening to stem appreciation in the

second-best performing Asian currency, according to traders.

"Given offshore funds' strong dollar demand, the won has

room to weaken to around 1,090," said a senior foreign bank

trader in Seoul, referring to the won's value against the

dollar.

Still, foreign investors extended a buying spree in the

country's main stock market to a 21 consecutive session,

reversing earlier selling.

Daewoo Shipbuilding & Marine Engineering Co Ltd 042660.KS

said on Tuesday it had won a 572.8 billion won ($534.2

million)order to build a large jack-up rig for Denmark's Maersk

Drilling, causing expectations of more demand for the won.

RINGGIT

The ringgit fell as offshore funds sold it and local

interbank speculators joined the offers.

Still, some investors looked to cover short positions in the

Malaysian currency around 3.2400 per dollar.

It has the 50.0 percent Fibonacci retracement at 3.2395 of

its appreciation between late August and earlier September.

"I will not buy dollars here as the ringgit has reached our

target," said a senior Malaysian bank trader in Kuala Lumpur.

CURRENCIES VS U.S. DOLLAR

Change on the day at 0505 GMT

Currency Latest bid Previous day Pct Move

Japan yen 98.67 98.74 +0.07

Sing dlr 1.2563 1.2543 -0.16

Taiwan dlr 29.586 29.632 +0.16

Korean won 1077.30 1072.20 -0.47

Baht 31.41 31.31 -0.32

Peso 43.53 43.37 -0.37

Rupiah 11575.00 11460.00 -0.99

Rupee 62.59 62.75 +0.26

Ringgit 3.2330 3.2155 -0.54

Yuan 6.1211 6.1210 -0.00

Change so far in 2013

Currency Latest bid End prev year Pct Move

Japan yen 98.67 86.79 -12.04

Sing dlr 1.2563 1.2219 -2.74

Taiwan dlr 29.586 29.136 -1.52

Korean won 1077.30 1070.60 -0.62

Baht 31.41 30.61 -2.55

Peso 43.53 41.05 -5.70

Rupiah 11575.00 9630.00 -16.80

Rupee 62.59 54.99 -12.14

Ringgit 3.2330 3.0580 -5.41

Yuan 6.1211 6.2303 +1.78

($1 = 1072.3 won)

(Editing by Kim Coghill)

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