Asian currencies mostly subdued; rupiah hit by political woes

EMERGING MARKETS-Asian currencies mostly subdued; rupiah hit by political woes

By Roushni Nair

Jan 29 (Reuters) –Asian currencies were subdued on Monday, with the Indonesian rupiah extending losses on concerns the country’s finance minister may resign, while Singapore’s dollar was largely flat after monetary policy was left unchanged, as expected.

The Indonesian rupiah IDR=, among one of the worst performing currencies so far in 2024 after falling nearly 3%, slipped 0.2% by 0320 GMT. In the past week alone, the currency has declined by more than 1% against the dollar.

Confidence in the rupiah has faltered over the last two weeks following local media reports that Indonesia’s Finance Minister Sri Mulyani Indrawati could quit ahead of the Feb. 14 presidential election, which raised questions about the country’s fiscal outlook.

The Singapore dollar SGD= was muted after the Monetary Authority of Singapore, which has moved to a quarterly meeting schedule in 2024 from a semi-annual schedule, left its policy unchanged for a third time following five consecutive tightening moves since October 2021.

“We cannot rule out a small probability of another policy tightening, if inflation turns out higher than expected due to geopolitical shocks, better-than-expected global growth or a pick-up in domestic price pressures due to the pass through of accumulated business costs…,” analysts at Maybank wrote.

Along the same lines, analysts at Barclay’s said the likelihood of foreign exchange policy easing this year in Singapore is lower than what most market participants are pricing in.

The regional calendar for the week includes PMI’s from across the continent, with fourth quarter growth figures from Taiwan, Hong Kong and the Philippines, and the latest inflation figures from Indonesia and South Korea.

While China’s efforts last week to support its ailing markets helped lift sentiment, a court order to liquidate property giant China Evergrande Group 3333.HK could deepen the crisis in the sector and dampen investor confidence in Southeast Asia’s largest trading partner.

The Chinese yuan CNY=CFXS was unchanged, while stocks in Shanghai .SSEC were up 0.3%.

Among other currencies in the region, Thailand’s baht THB=TH and the Taiwanese dollar TWD=TP were both up 0.2%.

Ongoing fiscal uncertainty has weighed on the baht after the Bank of Thailand faced repeated requests from the government to cut rates amid concerns of a weakening economy, however the currency has managed to inch higher for four straight sessions.

The Philippine peso PHP= led losses to give up 0.3%, while the Malaysian ringgit MYR= was flat, last down 0.1%.

Equities in the region were mostly trading higher, extending a relief rally from last week on measures by Beijing designed to shore up the equity market and boost the recovery of the world’s second largest economy.

Shares in South Korea .KS11 led the charge to gain 1.43%, while those in India .NSEI were up nearly 1%. Stocks in Indonesia .JKSE and Malaysia .KLSE were each up 0.5%.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up by 0.7%, notching a near 2-week high.

HIGHLIGHTS:

** Indonesian 10-year benchmark yields largely held steady at 6.640%

** HK court orders China Evergrande to liquidate with debts of $300 bln

Asia stock indexes and currencies at 0335 GMT
COUNTRY	FX RIC	FX DAILY %	FX YTD %	INDEX	STOCKS DAILY %	STOCKS YTD %
Japan	JPY=	+0.00	-4.79	.N225	0.92	8.38
China	CNY=CFXS	-0.06	-1.18	.SSEC	0.10	-2.08
India	INR=IN	-0.03	+0.08	.NSEI	0.00	-1.74
Indonesia	IDR=	-0.06	-2.72	.JKSE	0.02	-1.85
Malaysia	MYR=	-0.08	-2.94	.KLSE	0.46	4.02
Philippines	PHP=	-0.24	-1.88	.PSI	-0.40	3.24
S.Korea	KRW=KFTC	-0.03	-3.64	.KS11	1.18	-5.55
Singapore	SGD=	+0.01	-1.61	.STI	0.07	-2.43
Taiwan	TWD=TP	+0.22	-1.60	.TWII	0.51	0.87
Thailand	THB=TH	+0.11	-4.03	.SETI	0.06	-3.31

Reporting by Roushni Nair in Bengaluru