Bottom in Won, Rupiah and Rupee

A woman looks at an electronic currency board at a money changer
in Jakarta October 24, 2008. Indonesia's central bank will always be
in the market to support the rupiah, Bank Indonesia Governor Boediono said
on Friday, as the currency weakened to its lowest level
in nearly three years. REUTERS/Enny Nuraheni (INDONESIA)
According to Hiroshi Morikawa - senior strategist in Tokyo at MU Investments Co, The Asian financial system is on a stronger footing. That's why Asia's currencies have the potential to outperform.

The biggest rout in Asian currencies since the crisis in 1997 is tempting investors to buy in the region that still enjoys the world's fastest economic growth and $4 trillion of reserves. While stocks and foreign exchange rates in emerging markets tumbled since the collapse of Lehman Brothers Holdings Inc. in September, Templeton, Sydbank and Mirae Asset Global Investments Ltd. said Asian economies are safer because banks and governments spent a decade amassing reserves, laying the foundation for sustained growth.

Franklin Templeton Investments, which manages about $500 billion, favors the Malaysian ringgit and China's yuan. While Sydbank A/S, Denmark's third-largest bank, is buying South Korean won, Indonesian rupiah and Indian rupee. Goldman Sachs Group Inc. said last week that the won may gain 10 percent the next six months.

The differential in growth between Asia and other regions should continue to attract capital, and growth may further benefit from initiatives of local governments that have significant resources to bolster domestic demand. A longer-term picture, Asian currencies should perform better.

China, India and Southeast Asia's five other largest economies will grow 8.4 percent this year and 7.7 percent in 2009, according to the International Monetary Fund in Washington. The growth is very higher if it’s compared to US’ GDP which will expand 0.1 percent next year. While the forecast for the 15 European nations sharing the euro is only 0.2 percent.


Related Posts :

1. Indonesian Banks Better Prepared
2. Sir John Templeton's 16 Rules of Investment Success

Sources :

Bloomberg: Templeton, Sydbank See Won, Rupiah, Rupee Bottoming (Update2), November 3, 2008 04:23 EST

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