Credit: REUTERS/THOMAS WHITEBy Archishma Iyer
Aug 12 (Reuters) - The Indonesian rupiah hovered near a two-month high on Friday amid expectations the central bank will adopt an aggressive approach to combat inflation, while the Malaysian ringgit firmed as robust economic growth lifted market sentiment.
Among other regional currencies, the Singapore dollar SGD= and the Taiwan dollar TWD=TP were flat.
The Indonesian rupiah IDR= scaled to its highest since June 13 to trade at 14,670 against the dollar. The currency has witnessed a recovery since June lows, firming more than 1% so far this month as the economy remains on track for a recovery.
With inflation and the prospect of a global recession, which could draw money away from riskier assets, there are expectations that Bank Indonesia (BI) could raise its interest rate as it is one of the last countries in the region yet to tighten their pandemic-era loose policy.
"Indonesia's terms of trade have looked increasingly attractive over recent months, offering support to its current account position and the rupiah," analysts from TD Securities said in a research note.
Analysts at Citi and OCBC are expecting the BI to raise its benchmark seven-day reverse repurchase rate in a meeting later this month, with Citi seeing a 25-basis-point hike. However, Maybank and ANZ do not see the central bank rushing to tighten.
The Malaysian ringgit MYR= saw a marginal rise despite strong data, as the central bank flagged that slowdown in global growth is expected to pose a risk to the country's outlook for the rest of 2022.
Analysts from Barclays expect the Malaysian central bank to continue its path of rate tightening amid growth optimism.
"While Bank Negara Malaysia (BNM) has already increased the policy rate by 50 bps in the current cycle, the resilience of the growth recovery could push BNM to continue tightening," Barclays analysts wrote.
Markets across the region were volatile, with stocks in Singapore .STI, Indonesia .JKSE and China .SSEC falling between 0.1% and 1%, while equities in the Philippines .PSI and Malaysia .KLSE were up 0.3% each.
Globally, investors remained on the back foot, as investors digested the need for a continuous boost in interest rates to temper down elevated price pressures, despite a softer-than-expected CPI reading on Thursday. .N
Thai markets .SETI, THB=TH were shut on account of a public holiday.
HIGHLIGHTS:
** POLL - Thailand's tourism-reliant economy likely gathered pace in Q2
** Indian shares on track for fourth weekly gain; inflation data in focus
** Indonesia's benchmark 10-year bond yield down 6.953%
Asia stock indexes and currencies at 0711 GMT
COUNTRY
FX RIC
FX DAILY %
FX YTD %
INDEX
STOCKS DAILY %
STOCKS YTD %
Japan
JPY=
-0.22
-13.66
.N225
2.62
-00.85
China
CNY=CFXS
+0.12
-5.67
.SSEC
-0.15
-9.98
India
INR=IN
-0.04
-6.70
.NSEI
0.14
1.90
Indonesia
IDR=
+0.72
-2.80
.JKSE
-0.54
8.21
Malaysia
MYR=
-0.04
-6.32
.KLSE
0.31
-3.66
Philippines
PHP=
-0.40
-8.31
.PSI
0.28
-5.94
S.Korea
KRW=KFTC
+0.05
-8.72
.KS11
0.16
-15.10
Singapore
SGD=
+0.01
-1.50
.STI
-0.98
4.67
Taiwan
TWD=TP
-0.14
-7.65
.TWII
0.60
-16.08
Thailand
THB=TH
-
-4.97
.SETI
-
-2.13
(Reporting by Archishma Iyer in Bengaluru; Editing by Sherry Jacob-Phillips)
((Archishma.Iyer@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
