Singapore/Mumbai: Asian currencies advanced for a third day as projections showed pro-bailout parties won enough seats to control Greece’s parliament, reviving investor interest in riskier assets.

The New Democracy and Pasok parties garnered a combined 162 seats in the 300-member parliament after 99 per cent of the vote from the weekend election was counted. The People’s Bank of China set the yuan’s reference rate at the strongest level since May 11 as leaders from the Group of 20 nations meet in Los Cabos, Mexico to outline measures to contain Europe’s debt crisis. India’s rupee slid after the central bank unexpectedly maintained borrowing costs.

“I do think this will be a brief risk rally, maybe lasting for a couple of days,” said Thomas Harr, the Singapore-based head of Asian foreign-exchange strategy at Standard Chartered Plc. “There are still a lot of problems in Europe.”

South Korea’s won strengthened 0.7 per cent to 1,157.25 per dollar at the close in Seoul, according to data compiled by Bloomberg. Malaysia’s ringgit gained 0.2 per cent to 3.1560, Taiwan’s dollar climbed 0.2 per cent to NT$29.886 and China’s yuan advanced 0.14 per cent to 6.3563.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s ten most-used currencies excluding the yen, touched the highest level since June 7. Its 60-day historical volatility rose to 2.84 per cent from 2.83 per cent on June 15.

G-20 support

The MSCI Asia-Pacific Index of stocks gained 1.3 per cent after advancing 2.4 per cent last week, the biggest five-day rally in five months. G-20 leaders will boost a $430 billion (Dh1.57 trillion) firewall the International Monetary Fund announced in April to contain Europe’s debt crisis, Mexican President Felipe Calderon said on June 16. The Federal Reserve holds its open-market committee meeting on June 19-20.

“Concerns surrounding Greece disappeared and this will have a positive effect on the market,” said Lee Jin Ill, a Seoul-based currency trader for Hana Bank. “Players are now focusing on the policies to be announced at the Fed meeting and the G20 summit.”

The yuan climbed by the most in two months as the central bank fixed its reference rate stronger for a fourth day, raising it by 0.13 per cent to 6.3005 per dollar. New-home prices in China fell in May from the month before in 40 of 70 cities tracked by the statistics bureau, a report showed today.

Rupee slump

The rupee slumped 0.6 percent to 55.8175 per dollar as the Reserve Bank of India unexpectedly kept its repurchase rate at 8 per cent on Monday, citing inflation risks. Only four of 25 economists in a Bloomberg News survey predicted the outcome, with 19 expecting a 0.25 percentage-point cut and the remainder a half-point reduction.

“Growth momentum is poor and policy remains too restrictive in our view, particularly given the weaker international backdrop,” Jonathan Cavenagh, a currency strategist at Westpac Banking Corp in Singapore, wrote in an email. “Near-term risks are that the rupee will underperform the broader risk-on move throughout the region.”

Elsewhere, Indonesia’s rupiah declined 0.6 per cent to 9,440 per dollar. Thailand’s baht and the Philippine peso were little changed at 31.47 and 42.265, respectively. Vietnam’s dong was steady at 20,965.