* South Korean won at over 1-week high
* Volatility likely as long as virus does not peak - analyst
* Malaysian ringgit strengthens
(Adds text, updates prices)
By Shriya Ramakrishnan
March 25 (Reuters) - South Korea's won rose sharply on
Wednesday after domestic policy measures to boost dollar
liquidity helped ease credit concerns, while most other Asian
currencies were range bound amid lingering concerns related to
the coronavirus outbreak.
Tracking sharp gains in local equity markets, the won
advanced as much as 1.8% to 1,227 against the greenback, its
strongest level in more than a week.
The South Korean government said it will further loosen key
capital flow rules temporarily to encourage local financial
institutions to supply more dollars, while the central bank also
plans to inject dollars into markets this week using a currency
swap with the U.S. Federal Reserve. While the dollar pulled back sharply from recent peaks, the
risk-on mood across the region was subdued as more countries
adopted stringent measures and imposed lockdowns in a bid to
step up virus containment efforts.
"To some extent, we are probably closer to a market bottom
than before and it is likely that some of the overshoots in USD
and excessive rise in bond yields correct lower at some stage,"
Christopher Wong, senior FX strategist at Maybank Singapore
said.
"That said it is not all hunky dory out there and markets
are likely to stay volatile for as long as coronavirus does not
peak and the virus spread is faster than policy responses."
India ordered a lockdown for the next three weeks, while
Thailand will be in emergency mode from Thursday for a month to
deal with the pandemic. The Thai baht THB=TH weakened as much as 0.3% during the
session before paring some losses.
The Chinese yuan CNY=CFXS eased slightly, while the
Philippine peso PHP= weakened 0.7%, its worst intraday
performance in more than a week.
The Singapore dollar SGD= wavered between positive and
negative territory. Markets will now focus on the release of
first-quarter preliminary growth figures, new stimulus measures
and the central bank's policy decision on Thursday. Meanwhile, the Malaysian ringgit MYR= strengthened 1% to
4.385 per dollar.
Bank Negara Malaysia said the central bank has enough
liquidity to ease financial strains and support intermediation
activities, while it will continue to supply daily ringgit
liquidity to banks via various tools under its open market
operations. The Malaysian government extended a two-week virtual
lockdown to April 14 and is also set to announce a comprehensive
people-oriented economic stimulus package on Friday.
Financial markets in India and Indonesia were closed for a
holiday.
CURRENCIES VS U.S. DOLLAR
Change on the day at
0526 GMT
Currency Latest bid Previous Pct
day Move
Japan yen 111.380 111.21 -0.15
Sing dlr 1.446 1.4462 +0.01
Taiwan dlr 30.291 30.316 +0.08
Korean won 1229.400 1249.6 +1.64
Baht 32.800 32.79 -0.03
Peso 51.215 50.86 -0.69
Ringgit 4.385 4.428 +0.98
Yuan 7.071 7.0620 -0.12
Change so far in 2020
Currency Latest bid End 2019 Pct
Move
Japan yen 111.380 108.61 -2.49
Sing dlr 1.446 1.3444 -7.03
Taiwan dlr 30.291 30.106 -0.61
Korean won 1229.400 1156.40 -5.94
Baht 32.800 29.91 -8.81
Peso 51.215 50.65 -1.10
Ringgit 4.385 4.0890 -6.75
Yuan 7.071 6.9632 -1.52