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Indonesia’s rupiah surged more than 1%
on Thursday as fears of rate hikes lingered after inflation
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stayed above the central bank’s target range, while a slide in
the US dollar on signs of the Federal Reserve easing its pace
of policy tightening added heft.
The rupiah, which has shed more than 8% this year,
firmed as much as 1.3% and enjoyed its best day in nearly three
weeks, after data showed Indonesia’s inflation eased in November
but stayed above the central bank’s target range of 2%-4%.
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Bank Indonesia (BI) would maintain a front-loaded and
pre-emptive interest rate policy next year to control inflation,
Governor Perry Warjiyo said on Wednesday.
“Core inflation was tagged as one of the main factors that
would drive any BI policy adjustment and we will need to see
this head much lower before BI considers reversing its current
hawkish stance,” said Nicholas Mapa, a senior economist at ING.
“One other factor that could keep BI on the hiking path
would be the Indonesian rupiah… We expect BI to follow through
with a rate hike in December although we could see BI slow its
pace of tightening as early as next year.”
Stocks in Jakarta eased 0.6%.
Broader strength in Asia was supported by comments from Fed
Chair Jerome Powell overnight, while easing COVID curbs in China
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Also provided investors with some respite.
“The (Powell’s) speech seemingly provided markets some
Clarity that the down-shifting is coming earlier than expected,
as markets were previously still split in their expectations for
December,” said Yeap Jun Rong, market strategist at IG.
Malaysia’s ringgit hit a more than five-month high
against the US dollar and firmed 1%. The currency has
strengthened about 2% since the appointment of a new prime
minister last week, but is still down 5.5% for the year.
Thailand’s baht, which gained on Wednesday after
the central bank raised rates by 25 basis points, climbed a
0.5% further to its highest level since June 29.
Most stock indexes also clocked gains with Thailand
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touching a more than two-month high, though stocks in the
Philippines lost 0.5% and snapped a six-day winning
streak.
Philippines’ central bank, meanwhile, hinted at policy
flexibility to bring inflation back to target.
HIGHLIGHTS:
** Indonesian 10-year benchmark yields fall 7.3 basis points
to 6.876%
** China Caixin manufacturing PMI beats at 49.4 vs poll 48.9
** Factory output slumped widely across Asia in November-
survey
Asia stock indexes and currencies at
0717 GMT
COUNTRY FX RIC FX FX INDEX STOCKS STOCKS
DAILY % YTD % DAILY YTD %
%
Japan +1.45 -15.4 0.92 -1.97
2
China
India +0.34 -8.40 0.48 8.61
Indonesia +1.19 -8.33 -0.60 6.95
Malaysia +0.98 -5.36 0.32 -2.86
Philippines +0.57 -9.19 -0.68 -5.44
S.Korea
Singapore +0.41 -0.50 0.26 5.62
Taiwan +0.88 -9.65 0.90 -17.60
Thailand +0.50 -4.44 0.93 -0.43
(Reporting by Roushni Nair in Bengaluru; Editing by Dhanya Ann
Thoppil)
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