EM ASIA FX-Lira crisis hits Asian currencies as investors flee to safety

(Adds text, updates prices)

By Chandini Monnappa

Aug 13 (Reuters) - Asian currencies were battered on Monday

with the Indian rupee touching a record low as the ongoing

crisis in Turkey spilled over to emerging markets and investors

flocked to safe-haven assets.

The Turkish lira tumbled to a record low,

weakening as much as 13.34 percent, over concerns about Turkish

President Tayyip Erdogan's rigid control over the economy and a

worsening diplomatic rift with the United States.

"If investors continue to be concerned about the events in

Turkey, and they likely will be, we could see more pain in store

when it comes to risk appetite in the week ahead," Jameel Ahmad,

global head of currency strategy & market research at FXTM wrote

in a note.

Investors fear the sell-off in the lira could have a ripple

effect in global financial markets with the euro, the South

African rand and Mexico's peso already on the receiving end from

Turkey's crisis.

Erdogan, who has called himself the "enemy of interest

rates," wants cheap credit from banks to fuel growth, but

investors fear the economy is overheating and could be set for a

hard landing.

Worries about the exposure of European banks to crisis-hit

Turkey prompted investors to bid up safe havens such as the U.S.

dollar and Japanese yen.

The dollar index added 0.07 percent at 96.423 while

the Yen strengthened 0.58 percent by 0535 GMT

"Today's market is a little bit more about recalibrating the

investment agenda. Investors want to reduce their position. Kind

of like, once bitten, twice shy," said Taye Shim, head of

research at Jakarta-based Mirae Asset Sekuritas.

The Indonesian rupiah plunged nearly 1 percent on to

its weakest since October 2015, after data showed on Friday the

country's current account deficit, a major concern for global

emerging market investors, swelled in the second quarter to the

largest in nearly four years.

Indonesia's central bank is intervening to defend the

rupiah, a senior official said on Monday.

"The bank intervening in both the FX and bond market can

only smooth excessive movement in the rupiah not change its

direction," said Gao Qi, FX Strategist(EM Asia)at Scotiabank.

China's yuan slid 0.5 percent, in line with

regional peers.

"A worsening yuan is like pouring oil on a fire," said

Mirae's Shim.

The People's Bank of China (PBOC) lowered the yuan midpoint

rate to 6.8629 per dollar, its weakest level since

May 31, 2017, which was 0.3 percent softer than Friday's fix of

6.8395.

Last week, the yuan fell for the ninth straight week, the

longest weekly losing streak since 1994. It has fallen about 9

percent against the dollar since the end of March.

South Korea's won and the Taiwan dollar

weakened 0.48 percent and 0.32 percent respectively.

THE INDIAN RUPEE

India's rupee, which has been the region's worst

performing currency so far this year, weakened more than one

percent hours before consumer inflation data for July was due.

A Reuters poll found that July inflation was expected to be

4.51 percent versus a five-month high of 5.0 percent hit in

June.

Inflation remains a central concern for India, with rising

crude oil prices adding to imported inflation. Moreover, recent

erratic Indian monsoons have dimmed the outlook for

winter-harvested crops in a largely agriculture-reliant economy.

The following table shows rates for Asian currencies against

the dollar at 0600 GMT.

CURRENCIES VS U.S. DOLLAR

Currency Latest bid Previous day Pct Move

Japan yen 110.240 110.92 +0.62

Sing dlr 1.376 1.3733 -0.18

Taiwan dlr 30.807 30.708 -0.32

Korean won 1134.400 1128.9 -0.48

Peso 53.330 53.135 -0.37

Rupiah 14610.000 14470 -0.96

Rupee 69.455 68.83 -0.91

Ringgit 4.090 4.083 -0.17

Yuan 6.875 6.8440 -0.46

Change so far in 2018

Currency Latest bid End 2017 Pct Move

Japan yen 110.240 112.67 +2.20

Sing dlr 1.376 1.3373 -2.80

Taiwan dlr 30.807 29.848 -3.11

Korean won 1134.400 1070.50 -5.63

Peso 53.330 49.93 -6.38

Rupiah 14610.000 13565 -7.15

Rupee 69.455 63.87 -8.04

Ringgit 4.090 4.0440 -1.12

Yuan 6.875 6.5069 -5.36

(Reporting by Chandini Monnappa in Bengaluru; additional

reporting by Aditya Soni

Editing by Eric Meijer)