Asian currencies are set to drop for a third week, the longest run of losses since January, as the prospect of higher U.S. interest rates dims the appeal of emerging-market assets.
Indonesia’s rupiah and Malaysia’s ringgit led the declines after the Federal Reserve on Sept. 17 raised by 25 basis points its median estimate for where the federal funds rate will be by the end of 2015, while pledging to keep it near zero for a “considerable time.” Global funds pulled a combined $ 906.1 million this week from stocks in Indonesia, South Korea, Taiwan, India and the Philippines. Counting began across Scotland following a referendum on its independence from the U.K.
“The key concern is capital outflows from Asia to the U.S.,” said Ho Woei Chen, an economist at United Overseas Bank Ltd. in Singapore. “The U.S. could raise interest rates at a faster pace than expected.”
Bloomberg
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