EM ASIA FX-Rupiah slides, U.S. political drama hits Asia FX

Reuters

* Rupiah hits 4-1/2 year low, weakest since March 2009

* Worries about possible U.S. govt shutdown hurt Asia FX

* China Sept final HSBC manufacturing PMI adds to weak tone

By Masayuki Kitano

SINGAPORE, Sept 30 (Reuters) - The Indonesian rupiah hit a

4-1/2 low and Asian currencies fell broadly on Monday as the

increasing likelihood of a U.S. government shutdown prompted

investors to unload risky assets and currencies.

A disappointing final HSBC reading of September Chinese

factory activity also added to the weak tone of emerging Asian

currencies, with losses led by the rupiah and the Malaysian

ringgit.

"It's a very typical risk-off move, and not just in the

rupiah," said Satoshi Okagawa, senior global markets analyst for

Sumitomo Mitsui Banking Corporation in Singapore, referring to

Monday's broad decline in emerging currencies.

Asian bonds and equities were also facing selling pressure

due to the worries about a possible U.S. government shutdown,

Okagawa said.

If a stop-gap spending bill for the new fiscal year is not

passed before midnight on Monday, U.S. government agencies and

programmes deemed non-essential will begin closing their doors

for the first time in 17 years. [ID:ID:nL2N0HP04U]

The standoff is a harbinger of the next big U.S. political

battle: raising the federal government's borrowing authority.

Failure to do so by mid-October may result in a debt default

that could cripple the U.S. economy and send shockwaves around

the globe.

INDONESIAN RUPIAH

The Indonesian rupiah's indicative prices fell to as low as

11,660 against the dollar, according to Thomson Reuters data,

the weakest level since March 2009. The rupiah last stood at

11,640, down 0.9 percent for the day.

A Jakarta-based trader said foreign banks bought dollars

versus the rupiah, adding that there might be some outflows from

Indonesia as there was some selling of government bonds as well.

Yields on 10-year Indonesian bonds last stood at 8.496

percent, up about 27 basis points on the day,

according to Thomson Reuters data.

A near-term focal point for the rupiah is Indonesia's August

trade and September inflation data, which are due on Tuesday.

The rupiah has been the worst performing Asian currency in

2013 with a near 17 percent slide against the dollar, according

to Thomson Reuters data.

Due to Indonesia's current account deficit, the rupiah is

seen as more vulnerable to the Federal Reserve's expected

reduction in bond-buying stimulus than are other emerging

currencies.

While the rupiah gained a bit of reprieve after the Fed

surprised markets on Sept. 18 by not trimming its bond buying,

the currency has come under renewed pressure over the past week.

INDIAN RUPEE

The Indian rupee fell , but was still on

course for its best monthly performance against the dollar in a

year.

Dealers will await the June-quarter current account and

balance of payments data, due at 1130 GMT, with economists

expecting the gap to widen from the March quarter.

India's high current account gap has made the country

especially vulnerable to a surge in capital flows out of

emerging markets in recent months, sending the rupee down as

much as 20 percent this year to a record low on Aug. 28,

although it has since recovered ground.

The following table shows the position of Asian currencies

against the dollar at 0527 GMT.

CURRENCIES VS U.S. DOLLAR

Change on the day at 0527 GMT

Currency Latest bid Previous day Pct Move

Japan yen 97.91 98.27 +0.37

Sing dlr 1.2571 1.2566 -0.04

Taiwan dlr 29.566 29.656 +0.30

Korean won 1073.90 1073.70 -0.02

Baht 31.37 31.32 -0.16

Peso 43.54 43.34 -0.46

Rupiah 11640.00 11535.00 -0.90

Rupee 62.79 62.51 -0.45

Ringgit 3.2580 3.2285 -0.91

Yuan 6.1185 6.1202 +0.03

Change so far in

2013

Currency Latest bid End prev year Pct Move

Japan yen 97.91 86.79 -11.36

Sing dlr 1.2571 1.2219 -2.80

Taiwan dlr 29.566 29.136 -1.45

Korean won 1073.90 1070.60 -0.31

Baht 31.37 30.61 -2.42

Peso 43.54 41.05 -5.72

Rupiah 11640.00 9630.00 -17.27

Rupee 62.79 54.99 -12.42

Ringgit 3.2580 3.0580 -6.14

Yuan 6.1185 6.2303 +1.83

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(Additional reporting by Subhadip Sircar in MUMBAI; Editing by

Richard Borsuk)

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