Greece default fears hit Asia FX, ringgit around 9-1/2-yr low

[SINGAPORE] Emerging Asian currencies lost ground on Monday with the Malaysian ringgit around a 9-1/2-year low as Greece was seen on course to a default on its debt repayment this week, causing investors to seek safer assets.

China's central bank on Saturday cut lending rates for the fourth time since November and trimmed the amount of cash that some banks must hold as reserve, but investors focused on Greece's debt saga.

The ringgit fell 0.3 per cent to 3.7795 per dollar, its weakest since December 2005.

South Korea's won earlier lost nearly 1 per cent to 1,127.9 per dollar, its lowest since March 18.

The Indonesian rupiah slid 0.5 per cent to 13,365 per dollar. That compared to a 17-year low of 13,384 hit on June 9.

Cash-strapped Greece looks certain to miss its debt repayment to the International Monetary Fund on Tuesday as its European partners decided not to extend a credit lifeline after Athens' surprise move to hold a referendum on bailout terms.

Mounting fears of a default by Greece triggered bank runs at the weekend and forced the country to impose capital controls.

The euro lost almost 2 per cent with the prospect of Greece being forced out of the euro in plain sight, and stocks prices tumbled across Asia.

REUTERS

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