(Bloomberg) -- The Indian rupee and the South Korean won rose after Treasury Secretary Timothy Geithner said most U.S. banks have enough capital, helping address concerns that prompted investors to pull funds from emerging markets.
The rupee strengthened on speculation India’s economy will weather the global recession better than most developing nations. The won advanced as Vice Finance Minister Hur Kyung Wook said today South Korea’s stock and currency markets are “stable.” Japan’s export slump eased in March, ending a four-month run of record declines, according to a report released today.
“In general, Asian currencies are pretty stable,” said Thomas Harr, a senior currency strategist at Standard Chartered Plc in Singapore. “Risk appetite is still pretty high. The recession is probably slowing.”
The rupee gained 0.1 percent to 50.3925 per dollar as of 2:34 p.m. in Mumbai, according to data compiled by Bloomberg. The won climbed 0.1 percent to 1,348.10 in Seoul. The Korean currency has strengthened in each of the last six weeks and touched a three-month high of 1,298.05 on April 10. The rupiah rose 0.2 percent to 10,853 in Jakarta.
The Reserve Bank of India yesterday forecast the economy will grow 6 percent in the year that started April 1. Policy makers cut interest rates yesterday for the third time this year to spur spending and investment.
“The rupee should be on a stable-to-appreciating trend from here on,” Rahul Chadha, Hong Kong-based head of Indian equities at Mirae Asset Global Investment, said in an interview on Bloomberg Television. “India is one of the few trillion- dollar economies that will still grow at 5 percent. Foreign investors will find India a very attractive investment.” Mirae has about $40 billion of assets under management.
U.S. Stock Gains
The Kospi stock index climbed 1.4 percent to its highest close since October as overseas investors bought more Korean equities than they sold today. They turned net sellers of Korean shares yesterday, contributing to a drop in the won, after Bank of America Corp. set aside more money for bad loans. Geithner’s comments on U.S. bank finances helped the Standard & Poor’s 500 Index climb the most in a week.
“The Korea won is a touch stronger on the back of better equities in the U.S.” said Dwyfor Evans, a Hong Kong-based strategist at State Street Global Markets. “We’ve had five weeks of very strong equity performance that’s driven the emerging-market currencies stronger, but that’s been more hit- and-miss in the last few days.”
Credit Losses
Financial institutions worldwide have reported credit losses exceeding $1.3 trillion since a credit crisis began in mid-2007. Losses may reach $4.1 trillion by the end of 2010, the International Monetary Fund said in a report yesterday.
“Currently, the vast majority of banks have more capital than they need to be considered well capitalized by their regulators,” Geithner said yesterday in testimony to a U.S. congressional oversight panel.
The yen strengthened following the release of March trade figures. Japan’s Ministry of Finance said custom-cleared exports declined 45.6 percent from a year earlier, following a record drop of 49.4 percent in February.
The yen climbed to 98.26 per dollar in London from 98.73 yesterday in New York.
The Philippine currency fell to a seven-week low after the government today reported its biggest monthly budget deficit in at least 15 years. The shortfall swelled to 52.6 billion pesos ($1.1 billion) in March as slowing economic growth hurt state income.
The peso dropped 0.5 percent to 48.715 a dollar at the close in Manila, according to Tullett Prebon Plc. It earlier touched 48.725, the weakest since March 6.
Elsewhere, the Thai baht fell 0.1 percent to 35.59 a dollar. The Malaysian ringgit and the Singapore dollar were little changed at 3.6445 and S$1.5076, respectively. Taiwan’s dollar stayed at NT$33.86 and the Vietnamese dong traded at 17,775, from 17,781 yesterday.
To contact the reporters on this story: Lilian Karunungan in Singapore at at lkarunungan@bloomberg.net
