Asian currencies have sunk to record lows against the dollar in early trading on Monday.

Traders in Japan struggle to hold up the yen

For the first time the Malaysian ringgit has sunk to four to the dollar and the Thai baht to 50 to the dollar, less than half its value of last July. The Japanese yen, the Indonesian rupiah and the Phillipine peso are also down.

The rupiah ended at 6,700.00 per dollar, the peso to 42.65, the ringgit to 4.0350 and the baht to 50.90. The yen ended at 132 to the $.

The BBC's Charles Scanlon reports from Seoul (Dur: 1-16)

The currencies are now trading at levels which would have been unthinkable six months ago, but this time it is not the currency speculators who are to blame, but domestic companies.

They are selling their own currencies to buy dollars to pay off their foreign debts.

The won has been badly affected

Stock markets in the region are also down in the first day's trading of 1998. In Tokyo, the Nikkei closed at the end of a half-day session at 14,956.84 points, down 301.90 points, or 2%, from the final trading day of 1997.

The Stock Exchange of Thailand (SET) composite index lost 5.05 points, 1.4%, to 367.64 points at the morning close after slumping almost 3% shortly after trading began.

Meanwhile, the Thai Prime Minister, Chuan Leekpai, has said his government will try to renegotiate the terms of its $17bn rescue package with the International Monetary Fund.

He said Thailand was unlikely to meet an IMF condition of producing a cash surplus equivalent to 1% of its gross domestic product.
 

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