Asian currencies boosted as recovery gains speed

Singapore: Asian currencies including the South Korean won and Indonesia's rupiah rose last week to the highest levels of 2009, as increasing signs of a global economic recovery bolstered demand for emerging-market assets.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the 10 most-traded regional currencies excluding the yen, rallied to an 11-month high as record low rates for borrowing dollars increased appetite for higher-yielding investments. Overseas investors added to their holdings of Asian stocks, helping most benchmark share indexes extend this month's gains.

The Korean won gained 1.2 per cent last week to 1,207.80 per dollar in Seoul, according to data compiled by Bloomberg. It touched 1,204.60 on September 17, the strongest level since October. The rupiah appreciated 2.1 per cent to 9,715 and the Philippine peso rose 1.4 per cent to 47.665.

The Asia Dollar Index climbed 0.4 per cent in the five days, a third weekly gain.

Threadneedle Asset Management, Schroders and Ashmore Investment Management said in interviews this month they are buying emerging-market currencies as policy makers in New Delhi and Seoul may raise interest rates to avoid inflation.