SINGAPORE/BEIJING, November 18: The fresh fall of the South Korean won brought down other regional currencies today as volatility returned to southeast Asian markets. The South Korean won quickly plunged in early trade today to its daily permissible limit and a new record low of 1,012.80 against the US dollar as the central bank continued to stay out of the market. It closed at 1,008.60 yesterday. The Taiwan dollar followed suit, dropping to 31.60 to the us unit at the opening from its close of 31.366 yesterday. By mid-morning, the Singapore dollar eased to 1.5847 to the greenback, after closing at 1.5790 the day before, while the Malaysian ringgit was also lower at 3.3650 from 3.3280. The Indonesian rupiah was hovering around the 3,500 level, down from 3,490 yesterday, amid rumors that the central bank of Indonesia was prepared to step in at 3,510, while the Thai baht fell to 39.03 from 38.72 to the dollar. ``Most of the currencies are weaker because of the won,'' said an analyst with a US investment house. ``Volatility has returned on a contagion effect from the won,'' he added. The Asian currency turmoil will slow down the rest of the world's economy and growth will be slower in the united states and Europe, with US's economic growth expected to fall by half per cent next year, an American economist has said. The chief economist of Merrill Lynch Co, Bruce Steinberg, in a special presentation on the financial turmoil in Asia in Hong Kong yesterday said, ``All of the events in this part of the world are sending out a very powerful contractual impulse into the world's economy'' and predicted slower growth, slower corporate earnings, lower interest rate and less inflation. Economic growth will slow down sharply in Asia, the centre of the financial storm, he said. ``Latin America has already caught the Asian flu,'' he said adding as a direct result of the impact of the Asian crisis, Brazil, which he had predicted would grow by four per cent a month back, now will not grow at all in 1998. ``The downside risk is so significant, and if anything happens, the US growth will slow even more than the predicted 2.5 per cent,'' the economist said.

Corporate earnings will be lower but still positive in the US, Steinberg predicted adding that the US economy is going to end up in ''pretty good shape'' despite what happened in Asia.

Meanwhile, the seasonally-adjusted unemployment rate in Hong Kong has risen to 2.3 per cent in the August-October period. The figure rose from the July-September period when the unemployment rate stood at 2.2 per cent, the lowest in six years, Xinhua news agency said quoting the census and statistics department of the Hong Kong Special Administrative Region (SAR). A SAR government spokesman said that growth in total employment in the third quarter continued to outpace that in labour supply.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.