More pain ahead for emerging market currencies

“A resumption of construction work for the East Coast Rail Link, Light Rail Transit 3 and other mega projects should pull productivity growth back up, starting from the third quarter this year,’’ said Pong Teng Siew, head of research, Inter-Pacific Securities.

THE renewed plunge of the Indonesian rupiah, which hit a 20-year low, and Indian rupee, the worst performing major currency in Asia, puts emerging market (EM) currencies ever more in the spotlight.

Against the persistent dollar strength, EM currencies are under pressure again; last Thursday, the MSCI EM FX index hit its worst day since the Turkish lira sank to a new record low in August.