Asian Currencies Sink Again, Pull Down Stocks

East Asian currencies and stock markets opened the first full week of the new year on a bearish note today, with many key currencies falling to new lows and stocks following.

The Malaysian ringgit, Indonesian rupiah and Thai baht all plunged to record lows--a clear sign that the Asian economic and financial crisis has not yet bottomed.

The ringgit slumped to 4.01 to the dollar, a new low, from 3.97 on Friday. The rupiah dove to 6,350 to the dollar, also a new low, from 5,925 on Friday.

Traders said Asian companies continue to try to push more of their assets into dollars, at the expense of local currencies, as a way of hedging against further turmoil in the region.

The tumbling currencies helped depress stock prices across the region today. At midday the main Malaysian share index was down 2.9% to 555.32. The main Thai stock index sank 3% to 361.63.

Stocks also fell further in Tokyo in a shortened session today. The Nikkei-225 index dropped 301.90 points, or 2%, to 14,956.84. The dollar eased slightly against the yen, buying 132.21 yen today in Tokyo versus 132.55 on Friday.

In South Korea, the country’s currency, the won, weakened with most other Asian currencies early today, falling to 1,750 to the dollar versus 1,695 at last week’s close.

But the main South Korean stock index was up at midday, adding 11.13 points, or 3%, to 396.62.

Elsewhere in the region, Hong Kong’s Hang Seng stock index was down 2.3% at midday, while Singapore’s Straits Times index was off 1.4%.