HONG KONG: Emerging market currencies sank in Asia on Friday, with the Indian rupee at a record low as dealers fear contagion from financial crises in Argentina and Turkey.
Forex traders have been dumping emerging market currencies after Argentina’s peso became the latest to hit the buffers on concerns about the country’s economy.
The peso hit a record low near 40 to the dollar Thursday despite the central bank hiking interest rates 15 percentage points to 60 per cent. It has lost 53 per cent of its value since the start of the year as the government of President Mauricio Macri faces a financial catastrophe.
At the same time, Turkey’s lira continues to face heavy selling after a deputy central bank governor resigned with the economy facing a possible recession, made worse by US sanctions. The currency has also lost about half its value this year.
The flight out of emerging market units hit India, where the rupee fell to 71 against the dollar for the first time on Friday. The embattled currency has lost about 10 per cent this year.
And the Indonesian rupiah also dived, briefly hitting the 14,750 to the dollar mark seen during the Asian financial crisis in 1998.