EMERGING MARKETS-Rupiah hit by fourth rate cut, FinMin exit sinks baht
By Shriya Ramakrishnan
July 16 (Reuters) - The Indonesian rupiah retreated on Thursday after central bank officials cut interest rates by another quarter point, while the Thai baht sank following the surprise departure of its finance minister in an Asian morning marked by a dramatic dive in Chinese shares.
Bank Indonesia (BI) cut its benchmark interest rate to 4.00%, the lowest since at least 2016 and in line with a slim majority of analysts in a Reuters poll, as it strives to do more to prop up an economy sliding towards recession.
The move follows the launch of a $40 billion financing scheme earlier this month which also includes central bank bond buying.
"(The bank) has shifted towards growth support ... cutting rates over two consecutive meetings," said Wei Liang Chang, a macro strategist at DBS Bank.
"Lower rates may induce outflow pressures on the rupiah, especially if liquidity is to expand with BI’s government debt purchases."
In military-controlled Thailand, the baht THB=TH weakened as much as 0.8% to 31.74 per dollar and the benchmark stock index .SETI dropped 0.5%, after finance chief Uttama Savanayana and two other ministers resigned.
The shake-up comes as the government rolls out billions of dollars of stimulus measures to support an ailing economy through the coronavirus pandemic at a time when investors are also eyeing its choice for the next governor of the Bank of Thailand.
Thai Prime Minister Prayuth Chan-ocha said the cabinet reshuffle would take place by next month, having earlier said it would happen in September.
"Political noise does not bode well for consumer and business sentiment," said Tim Leelahaphan, economist at Standard Chartered Bank.
"While the government has sufficient borrowing room to support the economy, political stability is crucial – especially with the fiscal package being rolled out."
Chinese stocks .SSEC were the worst performers, plunging about 4.5% as concerns about deteriorating U.S.-China relations took some of the shine off better-than-expected economic growth data.
Philippine stocks .PSI, however, gained as investors picked up blue-chip stocks after losses this month which have outstripped other Asian markets. The Manila benchmark index closed about 2.2% higher after steep declines a day earlier.
** Indonesian 3-year benchmark yields are down 2.9 basis points at 5.867%
** In the Philippines, top index gainers are Bloomberry Resorts Corp BLOOM.PS up 12.48% at 7.48 peso, First Gen Corp FGEN.PS up 6.28% at 23.7 peso, Megaworld Corp MEG.PS up 5.33% at 3.16 peso
** Top losers on the Singapore STI .STI include CapitaLand Commercial Trust CACT.SI down 2.79% at S$1.74; Genting Singapore Ltd GENS.SI down 2.55% at S$0.765; UOL Group Ltd UTOS.SI down 1.73% at S$6.83
Asia stock indexes and currencies at 0758 GMT
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(Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Patrick Graham)
((Shriya.Ramakrishnan@thomsonreuters.com; +91 8061822842 ;))
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