EMERGING MARKETS-Indonesian rupiah lags Asia FX; Thai baht hovers at six-week lows

Credit: REUTERS/ATHIT PERAWONGMETHA

Indonesia's rupiah fell to a near two-month low on Friday, a day after the central bank cut interest rates for a fourth time this year, trailing other Asian currencies that were supported by hopes of more stimulus to shore up the battered global economy.

By Shriya Ramakrishnan

July 17 (Reuters) - Indonesia's rupiah fell to a near two-month low on Friday, a day after the central bank cut interest rates for a fourth time this year, trailing other Asian currencies that were supported by hopes of more stimulus to shore up the battered global economy.

With Indonesia also recording one of the highest COVID-19 death rates in east Asia outside China, stocks .JKSE in the country edged lower and the rupiah IDR= weakened 0.7% to 14,660 a dollar, on course for weekly declines of about 2%.

Bank Indonesia cut its benchmark interest rate on Thursday to 4.00%, as expected, but said further reductions would depend on indicators such as inflation in Southeast Asia's largest economy. It also did not mention if it had changed its full-year outlook for gross domestic product.

"While the burden sharing scheme could benefit Indonesia's economy, there is fear that the central government wouldn't be able to realise its planned spending," said Anthony Kevin, an economist at Mirae Asset Sekuritas Indonesia.

"This is why market participants were also looking for clues regarding the possibility of another rate cut."

In Thailand, the baht THB=TH hovered near six-week lows, with investors growing concerned about the government's fiscal response to the coronavirus crisis following the resignation of finance chief Uttama Savanayana and two other ministers.

"Some of the USD/THB selling in the last hour may be some profit taking and potentially owing to the fact that this surge in volatility could see increased scrutiny from the central bank," said Jingyi Pan, market strategist at IG Asia.

Offering some relief, Thailand's central bank said on Thursday it expected headline inflation to recover to 1%-3% in the second quarter of 2021 after an expected minus 1.7% this year.

Stocks across Asia's developing and emerging markets clocked modest gains, helped by a bounce back in U.S. stock futures as hopes of more government spending helped counter worries about the surge in global coronavirus cases. MKTS/GLOB

Philippine stocks .PSI, however underperformed, gripped by fears of further economic pain from the pandemic as the country reported its biggest daily spike in confirmed infections in more than a week.

The benchmark stock index was down nearly 2% and was set for its second straight weekly decline.

HIGHLIGHTS:

** Indonesian 10-year benchmark yields are up 1.4 basis points at 7.057%

** Top gainers on FTSE Bursa Malaysia Kl Index .KLSE include Top Glove Corporation Bhd TPGC.KL up 12.89% at 22.24 ringgit, Hartalega Holdings Bhd HTHB.KL up 4.49% at 16.3 ringgit, Hap Seng Consolidated Bhd HAPS.KL up ​ 2.78% at 8.87 ringgit

** In the Philippines, top index decliners are SM Prime Holdings Inc SMPH.PS down 4.28% at 31.3 peso; Ayala Land Inc ALI.PS down 3.5% at 31.8 peso; Robinsons Land Corp RLC.PS down 2.43% at 16.06 peso

Asia stock indexes and currencies at 0419 GMT

COUNTRY

FX RIC

FX DAILY %

FX YTD %

INDEX

STOCKS DAILY %

STOCKS YTD %

Japan

JPY=

+0.06

+1.32

.N225

-0.33

-4.06

China

CNY=CFXS

-0.16

-0.53

.SSEC

-0.51

4.71

India

INR=IN

0.00

-5.06

.NSEI

0.66

-11.16

Indonesia

IDR=

-0.68

-5.32

.JKSE

-0.12

-19.16

Malaysia

MYR=

-0.02

-4.17

.KLSE

0.92

-0.06

Philippines

PHP=

+0.16

+2.45

.PSI

-1.83

-22.77

S.Korea

KRW=KFTC

+0.04

-4.04

.KS11

0.66

0.02

Singapore

SGD=

+0.07

-3.36

.STI

0.13

-18.48

Taiwan

TWD=TP

+0.36

+2.09

.TWII

0.58

1.93

Thailand

THB=TH

-0.03

-5.53

.SETI

0.29

-14.44

(Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Kim Coghill)

((Shriya.Ramakrishnan@thomsonreuters.com; +91 8061822842 ;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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