Malaysia’s three-year government bonds headed for the worst week since July as increasing signs of a recovery in the U.S. economy added to speculation the Federal Reserve will pare its stimulus as soon as this month.
Asian currencies posted their first monthly loss since August, led by Indonesia’s rupiah and the Thai baht, as concern about current-account deficits and political unrest in the region fueled fund outflows.
Indian economic growth quickened last quarter from a four-year low on higher factory output, a revival threatened by looming interest-rate increases to fight rising prices in the nation of 1.2 billion people.
Malaysia’s ringgit was headed for its sixth weekly drop, the longest losing streak since 2005, as signs of a pickup in the U.S. economy bolstered speculation policy makers will trim stimulus. Government bonds rose.
India’s central bank is looking at ending an emergency facility under which it has directly sold dollars to state refiners since late August, according to three people with knowledge of the matter. The rupee fell.
Central banks in Indonesia and India, with the worst-performing currencies among Asian emerging markets this year, will face more challenges in 2013 as they balance inflation risks with the need to boost growth.