The Indonesian rupiah was destined for its worst moment
day in four months on Thursday, like a rising double whammy
COVID-19 Cases and an Aggressive Twist by the US Federal Reserve
overshadowed its central bank’s promise to back the currency
Other emerging Asian currencies were also weaker, led by a
1% decline in South Korean won, as the dollar hit
two-month highs after the Fed signaled it would increase interest
rates earlier than expected and consider reducing bond purchases.
Bank Indonesia (BI), which has cut rates by 150 basis points
and injected more than $ 57 billion in liquidity since 2020, it met
expectations by leaving rates at 3.50% and promised to continue
strengthen measures to stabilize the rupee.
The currency fell 0.7% to its lowest level in almost a
month, having weakened to 0.9% after the Fed reading
overnight and highest daily COVID-19 infections in Indonesia
count since the end of February.
Indonesia’s three-year benchmark yields lowered
previous gains and rose 1.1 basis points to 4.659%, while
The Jakarta stock index was down 0.1%.
Even as increased infections threaten to suffocate the
economic recovery, “emerging macro stability risks” limit BI
options to further relax the policy, analysts at Mizuho said.
“This will get worse after the harsh surprise
from the US Fed overnight, which we expect will increase
depreciation pressures on the IDR “.
BI’s decision also came immediately after the World Bank.
suggesting that the country maintain its accommodative monetary policy
and make the rupee exchange rate more flexible amid
Fed indications of policy tightening could
emerging market central banks will soon follow suit, leading to
you could withdraw cash from those markets.
A Reuters poll showed investors had cut long bets.
in most emerging Asian currencies, partly because they weigh the
prospect of tighter monetary adjustments.
“The stage is set for what I feel is a period of
increased volatility as the narrative changes and traders adjust to
a future reduction in liquidity conditions, ”said Chris Weston,
Head of Research at the Pepperstone corridor.
Philippine shares, which have soared more than 11% in
the last three weeks, they fell more than 1% and suffered their biggest
drop of a day in more than a month.
Outperforming their regional peers, stocks in Thailand
gained 0.3% after the government said it planned
reopen the nation to visitors within 120 days and launch the
economy dependent on tourism.
If the government’s plan to fully reopen the country and
getting vaccines is successful, it would give the economy a chance
in the arm in the high season of tourism of the country in the fourth
quarter, analysts at Phillip Capital said in a note.
** In the Philippines, the main losers of the index are Bloombery.
Resorts fell 2.4%, Universal Robina fell
2.3% and Ayala Land fell 2.3%.
** Top SETI winners from Thailand include Thai Textile
Industry rose 22.02%, Jasmine Telecom Systems rose
18.8% and Finansia Syrus Securities increased 18%.
Asia Stock and Currencies Indices at 0730 GMT
COUNTRY FX RIC FX DAILY% FX YTD% INDEX STOCKS DAILY% STOCKS YTD%
Japan +0.03 -6.71 -0.93 5.74
China -0.51 +1.53 0.21 1.51
India -0.64 -0.99 -0.32 12.42
Indonesia -0.73 -2.09 -0.06 1.60
Malaysia -0.46 -2.78 -0.50 -3.49
Philippines -0.25 -0.72 -1.23 -3.53
South Korea -1.17 -3.91 -0.42 13.62
Singapore -0.16 -1.29 0.13 10.54
Taiwan -0.22 +2.63 0.48 04/18
Thailand -0.64 -4.46 0.22 12.35
(Reporting by Shashwat Awasthi in Bengaluru; edited by Aditya