Emerging-market currencies fell, extending the longest stretchof weekly declines since 2000, as Malaysian assets tumbled,Turkey's lira touched a record low for a third day, and the rubleand Russian stocks retreated amid a slump in oil.

A gauge tracking 20 of the most-traded developing-nationcurrencies dropped 0.3 percent, with the ringgit weakening to thelowest level since 1998 and Thailand's baht slumping as anexplosion struck Bangkok's central shopping district. The currencymeasure has fallen for eight straight weeks as the prospect of higher U.S. interest rates and the shock devaluation of the yuan magnified risks. The MSCIEmerging Markets Index of stocks retreated 1.1 percent to 854.41 at11:30 a.m. in New York.

China's devaluation “will be something that will shape the restof the year for emerging-market currencies, especially given thefact that people view this as a clear indication that the Chineseauthorities are worried about the state of their economy,” saidAnders Svendsen, an analyst at Nordea Bank A/S in Copenhagen.

Svendsen expects emerging currencies will stay lower for therest of 2015, with a trough about the time the Federal Reservelifts interest rates, probably in September. Underpinning thepotential fallout of a weaker yuan on countries that export toChina, Morgan Stanley dubbed Brazil's real, Peru's sol, and Asiancurrencies in South Korea, Thailand, and Singapore as part of the“Troubled Ten.” China is the biggest export destination for allthese nations, data compiled by Bloomberg show.

Goldman Sachs Group Inc. lowered its forecasts for the yuan onMonday, saying slower growth in the world's second-largest economywill add to pressure on the currency. The yuan will decline to 6.60per dollar in 12 months, Goldman Sachs said, adding that a “fewsmall steps” for the currency may trigger a “big leap lower” forpeers in developing countries.

Bonds also sold off on Monday, with the premium investorsrequire to own emerging-market debt over U.S. Treasuries climbing0.04 percentage point to 3.83 percentage points, according toJPMorgan Chase & Co. indexes. Malaysia's debt underperformedpeers in Asia, and Turkey's notes led declines in emerging Europe.Both countries have been rattled by political crises that aredriving out investors.

The baht dropped 0.7 percent to 35.51 against the dollar aslocal reports in Thailand said as many as 15 people were killed inthe explosion.

In Turkey, where coalition talks failed last week, the BorsaIstanbul 100 Index fell to a five-month low and the lira slid to arecord 2.8678 per dollar. Malaysian shares sank to a three-yearlow, and the ringgit depreciated 0.4 percent, to 4.1028 per dollar.The currency's steepest weekly slide since 1998 is evoking memoriesof the clash between then-Prime Minister Mahathir Mohamad andhedge-fund manager George Soros.

As oil in the U.S. traded near a six-year low, Russia's rubleretreated 0.5 percent to 65.29 against the greenback. Thedollar-denominated RTS Index of equities fell 1.6 percent, whilethe Nigerian Stock Exchange All Share Index decreased 2.6percent.

Currencies trimmed losses Monday after data showed manufacturingin the New York region unexpectedly slumped in August, leading tosome speculation that the Fed will refrain from an increase inborrowing costs a little longer.

Nine out of 10 industry groups in the MSCI Emerging MarketsIndex fell Monday, led by technology and energy companies.SapuraKencana Petroleum Bhd., Malaysia's biggest oil and gasservices provider, tumbled the most on record.

–With assistance from Choong En Han in Kuala Lumpur and Ye Xiein New York.

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