[MUMBAI] Asian currencies completed a weekly loss, led by Singapore's dollar and South Korea's won, amid speculation emerging markets will see volatility in capital flows should Greece default.
Euro-area finance ministers reconvene Saturday for talks after discussions on Thursday failed to deliver an agreement on a bailout for Greece, which faces a debt repayment next week. German Chancellor Angela Merkel said the weekend meeting will be decisive for the indebted nation. The Bloomberg-JPMorgan Asia Dollar Index dropped 0.4 per cent from June 19, the biggest decline in three weeks.
"The broad-based weakness is due to risk aversion emanating from Greece," said Nizam Idris, head of foreign- exchange and fixed-income strategy at Macquarie Bank Ltd in Singapore. "Reading into the Greek situation, the fear is for capital outflows from Asia."
South Korea's won fell 0.8 per cent in the past five days versus the dollar, its biggest retreat in four weeks. The Singapore dollar lost 1 per cent, while the Taiwan dollar declined 0.2 per cent.
Malaysia's ringgit weakened 0.7 per cent in five days and 0.3 per cent on Friday to 3.7680 a dollar, according to data compiled by Bloomberg. The currency has dropped 2.7 per cent this month amid speculation the nation is facing its first credit- rating downgrade since 1998.
Fitch Ratings will review Malaysia's A- ranking before the end of the month, Andrew Colquhoun, head of Asia Pacific sovereign ratings, said June 23. The country is "more than 50 per cent likely" to be downgraded because of the worsening trade balance and concern about the ability of a state investment company to pay its debts, he said in March.
The yuan was little changed at 6.2090 a dollar in Shanghai this week, China Foreign Exchange Trade System prices show.
Indonesia's rupiah gained 0.2 per cent this week. India's rupee weakened 0.1 per cent and Thailand's baht fell 0.4 per cent.