A worker checks a 500 Indian rupee note as a man fills diesel in containers at a fuel station in Kolkata, India, August 14, 2018.
A worker checks a 500 Indian rupee note as a man fills diesel in containers at a fuel station in Kolkata, India, August 14, 2018. Reuters / RUPAK DE CHOWDHURI

Investors raised their bearish views on most Asian currencies, with short bets on the Indian rupee at a near two-year high, as Russia's invasion of Ukraine supercharged commodity prices and stoked inflation concerns, a Reuters poll showed on Thursday.

The poll of 13 respondents showed market participants turned short on the Singapore dollar and significantly extended short bets on the South Korean won, the Taiwanese dollar and the Philippine peso.

The invasion, which Russia calls a "special operation", has led investors away from risky emerging markets and caused regional bond yields to spike, as surging prices stoke worries over how economies recovering from the pandemic will manage higher inflation in the face of slowing growth.

Net energy importers such as India are the most at risk, as oil prices threaten to exacerbate inflationary risks at a time when retail inflation has already breached the upper limit of the central bank's tolerance band.

Bearish bets on the rupee hit their highest level since April 2020 as a result. The currency had slumped to a record low on Monday.

Analysts at DBS bank said in a note on Wednesday that fuel excise cuts might become necessary to cushion the hit from higher prices, which will widen India's current account deficit and put the central bank's dovish bias in "tricky territory".

Investors were also short on Indonesia's rupiah and Malaysia's ringgit, though the currencies were spared a drubbing due to the countries being major commodity exporters that would benefit from sky-high prices.

Still, risks from commodity export curbs linger, according to Vishnu Varathan, head of economics and strategy at Mizuho bank.

"While IDR's coal export offset provides uncharacteristic backstop against 'risk off', it exposes a single-point of failure should coal exports ban be imposed due to domestic shortages. Not unlike the tightening of curbs on palm oil exports," he said.

Bullish bets on the Chinese yuan, which has emerged as a regional haven during the Russia-Ukraine conflict, eased but were still largely healthy.

The yuan traded roughly flat against the U.S. dollar at 6.32 on Thursday. It had hit its highest in nearly four years last week, prompting major state-owned banks to buy the greenback to restrain the bullish currency.

The Thai baht saw long positions cut sharply as the country's tourism sector is likely to be hit by a drop in tourists from Russia due to the conflict and from elsewhere due to fuel prices, further pressuring another net oil importer.

The Asian currency positioning poll is focused on what analysts and fund managers believe are the current market positions in nine Asian emerging market currencies: the Chinese yuan, South Korean won, Singapore dollar, Indonesian rupiah, Taiwan dollar, Indian rupee, Philippine peso, Malaysian ringgit and the Thai baht.

The poll uses estimates of net long or short positions on a scale of minus 3 to plus 3. A score of plus 3 indicates the market is significantly long U.S. dollars.

The figures include positions held through non-deliverable forwards (NDFs).

(Editing by Subhranshu Sahu)