THE Malaysian ringgit depreciated for a fifth straight session on Friday to slump to a more than seven-month low due to a firmer dollar and weak oil prices, while the Turkish lira hit a fresh record low after a smaller-than-expected rate hike.
Most other Asian currencies were also on the back foot, with the South Korean won and Thai baht depreciating 0.6% and 0.4%, respectively, with the won trading at a more than two-week low.
The Turkish lira fell 0.6%, extending losses from Thursday after the country's central bank hiked its key rate by 650 bps, missing market expectations.
The Russian rouble sank 3.8% as oil prices fell sharply after the Bank of England hiked rates more than expected.
A persistently hawkish tone by the U.S. Federal Reserve as well as other major central banks has stoked fears that efforts to rein in runaway inflation will spark a recession.
"Asian currencies are cyclical and they might be weighed by fears that further tightening by central banks could bring about more significant downturn ahead," said Fiona Lim, senior FX strategist at Maybank.
Around 77% of investors have priced in a quarter-point Fed rate hike in July, with rate cuts seen at the end of the year or early next year, according to CME Fedwatch tool.
In Malaysia, the ringgit depreciated as much as 0.6% to hit 4.674 per dollar, its lowest level since Nov. 11.
Data released earlier showed inflation in May eased to 2.8% from 3.3% last month, which was lower than forecast by economists in a Reuters poll.
Elsewhere, the Indonesian rupiah was trading 0.4% lower, a day after the central bank kept its policy rate unchanged, as expected, adding it would calibrate rate cut decisions every month.
"We attribute these depreciations, particularly for the Malaysian ringgit and the Indonesian rupiah, to the recent decline in commodity prices, which has had a substantial impact on economies reliant on commodity export," said Rully A. Wisnubroto, senior economist atMirae Asset Sekuritas Indonesia.
For the week, the ringgit and the baht shed nearly 1.3% and 1.6%, respectively, while the rupiah was down 0.4%.
Meanwhile, inflation data from Singapore showed a key consumer price gauge rose 4.7% in May, while headline inflation was up 5.1% year-on-year in May.
The Singapore dollar was down 0.4%. Markets in China and Taiwan were closed for a public holiday.
HIGHLIGHTS:
** Philippine c.bank has done enough to tame inflation - governor
** Malaysia's May CPI rises 2.8% y/y, less than forecast - Reuters
