* Rupee to see worst monthly fall in Aug
* Rupiah to fall 6 pct, largest fall in 5 years
* Philippine peso to see worst month since May 2012
* Won up 1.3 pct so far; Taiwan dlr rises 0.7 pct
(Adds text, updates prices)
By Jongwoo Cheon
SINGAPORE, Aug 30 (Reuters) - The Indian rupee and
Indonesian rupiah led slides among emerging Asian currencies in
August as capital flowed out of the region on expectations the
U.S. Federal Reserve will soon begin to reduce monetary
While most regional units scratched out gains on Friday, the
damage for the month was extensive.
The rupee has tumbled 10.4 percent against the
dollar so far this month, which would be its largest monthly
depreciation ever if it ends around current levels, according to
Thomson Reuters data.
The rupiah has lost 5.9 percent so far in August,
which would be its biggest monthly fall since November 2008.
The Philippine peso has slid 2.7 percent, which
would be the largest monthly fall since May last year. The Thai
baht has fallen 2.4 percent and the Malaysian ringgit
has weakened 1.6 percent.
The Fed is expected to start scaling back its bond-buying
programme next month. An upward revision to second-quarter U.S.
economic growth bolstered the views.
"September will be a rough month for Asian FX, with the
potential Fed taper and sustained nervousness towards emerging
markets," said Emmanuel Ng, a foreign exchange strategist for
OCBC Bank in Singapore.
When asked which Asian currencies will be most vulnerable,
Ng said: "they are going to be the usual suspects, such as the
rupee, the rupiah and the ringgit, as markets sniff out the
Short positions in the rupee and some Southeast Asian
currencies hit the highest levels since the global financial
crisis in 2008 during the last two weeks as sentiment on
regional currencies deteriorated, a Reuters poll showed on
The rupee and the rupiah are seen as especially vulnerable
to an anticipated reduction in the Fed's quantitative easing.
Both India and Indonesia are struggling with growing current
account deficits, slowing economic growth and strong resistance
to implementing much-needed reforms.
Despite spreading gloom in South and Southeast Asian
currencies, their Northeast Asian peers enjoyed monthly gains.
The South Korean won has risen 1.3 percent on
capital inflows and exporters' demand for settlements. The
Taiwan dollar has risen 0.7 percent.
Investors dedicated to emerging Asian markets are betting
that Northeast Asian currencies will fare better than their
Southeast Asian counterparts due to superior fiscal and current
Their high-tech exports have proved more resilient to the
global slowdown, especially China's more recent slowdown, than
Southeast Asian economies which are heavily reliant on exports
of commodities and raw materials.
The ringgit rose as offshore funds covered short positions,
but its upside was limited by dollar demand from custodian banks
Those custodian banks bought dollars below 3.3000 to the
ringgit, traders said.
The Malaysian currency is expected to stay weaker in
September as investors are keeping an eye on if the Fed starts
winding down quantitative easing.
"There are so many uncertainties, such as Syria, U.S.
tapering and fund exits from emerging Asia," said a senior
Malaysian bank trader in Kuala Lumpur, adding the ringgit is
likely to fall further.
The ringgit saw some support at 3.3345 per dollar, the 50
percent Fibonacci retracement of its appreciation between 2009
But the Malaysian unit may weaken to 3.3640, its weakest
level in May 2010, once the retracement is broken, analysts
The peso gained as overall strength in regional units caused
investors to cover short positions.
The Philippine currency, however, gave up some of initial
gains on dollar demand from local companies, traders said.
Despite improvement in sentiment, onshore players including
lenders and corporates prefer dollars, they added.
"We could see a bit more upside in dollar/peso as it has
lagged the bigger rises in dollar/rupiah and dollar/rupee," said
a senior Philippine bank trader in Manila.
The peso may weaken to mid-45 per dollar in September.
Another trader said the peso may find support around 45.50,
given increasing remittance inflows in the next coming months.
The rupiah edged up 0.1 percent to 10,910 per dollar in the
interbank market as the central bank was spotted providing
dollar liquidity and a day after Bank Indonesia announced
further measures to shore up the currency, including rate hikes.
Banks in the country, however, still bought dollars above
11,000 for their customers, traders said, indicating investors
did not see the new steps as sufficient to halt the rupiah's
HSBC said Thursday's actions were constructive, but they may
not be enough to support the rupiah.
"In our view restoring price discovery is still critical and
more policy support will be needed to stabilize the IDR," it
said in a note.
Forwards markets pointed further depreciation in the rupiah
with one-month non-deliverable forwards to dollar
weakening to 11,440.
The baht advanced on exporters' demand for month-end
settlements and as some Japanese banks bought the currency.
Ten- and 5-year government bond yields
Still, investors hesitated to push the baht stronger than
32.00 per dollar, before July current account and trade data
later in the day.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0430 GMT
Currency Latest bid Previous day Pct Move
Japan yen 98.26 98.35 +0.09
Sing dlr 1.2751 1.2755 +0.03
Taiwan dlr 29.922 30.012 +0.30
Korean won 1109.10 1109.70 +0.05
Baht 32.08 32.18 +0.31
Peso 44.63 44.75 +0.28
Rupiah 10910.00 10920.00 +0.09
Rupee 67.40 66.56 -1.25
Ringgit 3.2985 3.3135 +0.45
Yuan 6.1205 6.1205 -0.00
Change so far in 2013
Currency Latest bid End prev year Pct Move
Japan yen 98.26 86.79 -11.67
Sing dlr 1.2751 1.2219 -4.17
Taiwan dlr 29.922 29.136 -2.63
Korean won 1109.10 1070.60 -3.47
Baht 32.08 30.61 -4.58
Peso 44.63 41.05 -8.01
Rupiah 10910.00 9630.00 -11.73
Rupee 67.40 54.99 -18.41
Ringgit 3.2985 3.0580 -7.29
Yuan 6.1205 6.2303 +1.79
(Additional reporting by IFR Markets' Catherine Tan; Editing by