Most emerging Asian currencies
weakened against a stronger US dollar on Thursday, with
Thailand’s baht shedding more than 1% following a quarter-point
rate hike that investors viewed as moderate to bring down
inflation running at a 14-year high.
Thailand’s central bank chief said the bank was ready to
adjust the pace of tightening monetary policy if needed and
would be prepared to hold an off-cycle meeting if necessary.
The comments came a day after the Bank of Thailand (BOT)
hiked its key interest rate by 25 basis points (bps) to tame
Inflation running far above its target range of 1% to 3%.
“We continue to expect gradual BOT tightening over the
coming months,” said Chua Han Teng, a DBS Research Group
“Still above-target inflation warrants additional interest
rate increases, but an economic recovery that has lagged peers
and is facing threats from a global slowdown cautions against
The baht led losses in the region, hovering near
Wednesday’s low of 38.45 per dollar – a level unseen in more
than 16 years. The currency has lost about 12.7% so far this
Meanwhile, the US dollar’s rally on the back of an ever
more hawkish Federal Reserve weighed on emerging Asian
currencies, with Indonesia, South Korea, Taiwan and China
stepping forward to stabilize their financial markets.
Stabilization efforts from policymakers around the world,
including the Bank of England’s (BoE) recent move, can help
restore market confidence and provide a temporary breather to
risk assets, said Christopher Wong, FX strategist at OCBC.
The BoE said on Wednesday it would buy as much as 5 billion
pounds ($5.40 billion) a day of long-dated government bonds
until Oct. 14. The announcement came after unfunded tax cuts
announced in Britain last week triggered a financial chaos
“The strong USD trend still needs to dissipate for currency
markets to take a more meaningful breather,” said Wong.
The dollar index, which measures the greenback
against a basket of six currencies, rose 0.5% to 113.59. It had
touched a 20-year high of 114.78 on Wednesday.
The Malaysian ringgit and the Philippine peso
fell 0.3% and 0.4%, respectively, while the Singapore dollar
weakened 0.5%. India’s rupee eased 0.1%.
The rupiah firmed 0.1% after hitting its lowest since
April 2020 on Wednesday. South Korea’s won and the
Taiwan dollar rose 0.1% each.
Equities in Southeast Asia were broadly higher, with Jakarta
and Shanghai the only markets trading in
Singapore and Bangkok led gains in the
region, rising 1.1% each. Equities in the Philippines and
India climbed 0.8% and 0.5%, respectively.
** RBI to raise rates again, slim majority of economists
expect 50-bp hike – Reuters poll
** Indonesia president sees Q3 GDP growth at 5.4%-6%
** India forex reserves set to shrink further, stir memories
of 2008 crisis – Reuters poll
The following table shows rates for Asian currencies against
the dollar at 0615 GMT.
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
Japan -0.35 -20.4 <.n2>
India +0.11 -9.19 <.ns ei>
Indonesi +0.07 -6.56 <.jk a se>
Malaysia -0.34 -10.3 <.kl se>
Philippi -0.36 -13.5 <.ps nes i>
Singapore -0.53 -6.44 <.st e i>
Taiwan +0.10 -13.0 <.tw ii>
Thailand -1.41 -12.7 <.se ti>
(Reporting by Upasana Singh in Bengaluru; Editing by Subhranshu