Indonesian rupiah slips on taper talks; Thai baht hovers at 5-mth high

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Indonesia’s rupiah weakened half a

percent on Thursday as the country gradually begins to rollback

its pandemic-era stimulus citing signs of an economic recovery,

while the Thai baht extended gains into a third straight day to

hover near a five-month high.

The Philippine peso firmed slightly even as the

country’s central bank kept its interest rates unchanged, and

the Taiwan dollar and the South Korean won

appreciated between 0.1% and 0.2%.

The Indonesian rupiah eased 0.5%, marking its worst

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session since early November as strong growth projections for

2023 of between 5.3% and 5.9% – above this year’s 5.2% growth

target – underscored the government’s tapering plans.

Analysts at Barclays see “a relatively challenging

environment in the short term” for the rupiah due to US

Federal Reserve normalization triggers, with Indonesian bonds,

one of the highest-yielding in the region, seen rising further.

Indonesia’s 10-year benchmark yield stands at

6.508%, up 13.2 basis points since the start of this year.

The Fed on Tuesday remarked that while it will begin raising

interest rates to combat inflation it will decide the pace of

hiking at each meeting, driving investors to riskier assets.

Back in Asia, the Philippine peso appreciated

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0.1% even as the central bank maintained record-low interest

rates for a 10th consecutive policy meeting, saying expectations

of manageable inflation allows it to retain policy support.

The Thai baht, the best performing regional

currency this year after a dismal performance in 2021, rose for

a third consecutive session, up about 0.4%, to linger near its

highest levels since early September.

Among equities, the South Korean benchmark jumped up

to 1.5% to hit its highest in a week, shares in Singapore

rose for a third day running, up about 0.5% as the island-nation

reported fourth quarter GDP higher than the government’s advance

Estimate and maintain its growth forecast for 2022.

“While official 5.5% forecast for 2022 still implies lower

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full-year growth in 2022, the forecast represents a solid

economic recovery, as the strength of 2021 GDP growth was

exaggerated by the outsized base effects arising from the

initial impact of the pandemic in 2020,” Barclays analysts said.

Other equity markets including the Malaysian benchmark

Thailand and Chinese equities rose in

the range of 0.1% and 0.9%.

Indonesian shares fell as much as 0.9%, and stocks

in Manila were down about 0.2%.

HIGHLIGHTS:

** Indian shares flat as Ukraine tensions offset Fed gains

** Indonesia 10-year bond yields inch up to 6.517%

** Philippines in talks with banks on structure of maiden

green bond issue – finmin

Asia stock indexes and currencies

at 0720 GMT

COUNTRY FX RIC FX FX INDE STOCKS STOCKS

DAILY % YTD % X DAILY YTD %

%

Japan +0.16 -0.17 <.n2>

China EC>

India +0.01 -0.98 <.ns ei>

Indonesi -0.41 -0.44 <.jk a se>

Malaysia -0.04 -0.50 <.kl se>

Philippi +0.12 -0.62 <.ps nes i>

S.Korea 11>

Singapore -0.05 +0.36 <.st e i>

Taiwan +0.10 -0.63 <.tw ii>

Thailand +0.40 +3.66 <.se ti>

(Reporting by Archishma Iyer; Editing by Shailesh Kuber)