BENGALURU (March 30): The Philippine peso sank to a record low on Monday, while the Indonesian rupiah narrowly avoided its historic 17,000-per-dollar low as the country’s central bank introduced a new tool for banks to manage foreign-currency liquidity.
Several emerging Asian markets, especially India, Thailand and the Philippines, have been hit hard by the US-Israeli war on Iran as surging oil prices stoke concerns about inflation and wider current account deficits.
Analysts at HSBC noted that terms of trade pressures could still worsen for net energy-importing currencies, with another source of pressure being portfolio flows.
The Philippine peso hit a low of 60.801 per dollar, while stocks in Manila tumbled 1.7% as the net oil-importing country grapples with an “imminent danger of a critically low energy supply”.
Indonesia, another oil-importing country, sees sustained foreign fund outflows due to concerns about the impact of elevated oil prices, adding to persistent concerns over fiscal and governance risks.
Foreign investors have pulled out 21.37 trillion rupiah (US$1.26 billion or RM5.1 billion) from Indonesia’s stock markets so far this month, the largest outflow in at least over a decade, according to LSEG data.
Stocks in Jakarta slid as much as 2.1%, taking losses for the month to nearly 14% and putting them on track for their worst monthly performance since March 2020. The benchmark gauge has been the worst performer in the region this year.
Its currency, the rupiah, was last quoted around 16,985 a dollar, a stone’s throw from its record low of 17,000.
Bank Indonesia on Monday rolled out new FX repo operations using its foreign currency-denominated securities, providing banks with another option to manage liquidity, particularly in foreign exchange.
“The instruments function as high-quality, short-term collateral: Banks obtain the dollars they need, repay the loan when cash returns, while the collateral stays on the balance sheet,” said Wei Li, head of multi-asset investments at BNP Paribas.
“The repo’s market-neutral design limits immediate pressure on the IDR/USD rate, unlike a direct spot sale that would inject rupiah liquidity.”
Elsewhere in emerging markets, Malaysia’s benchmark stock index dipped 1.5%, while stocks in South Korea and Taiwan closed down 3% and 1.8%, respectively.
Among other regional currencies, the Taiwan dollar weakened to 31.996 per dollar, while South Korea’s won fell to 1,521.10 per dollar in intraday trade, its lowest since March 10, 2009.
Foreign investors have pulled out 34.71 billion baht (US$1.06 billion or RM4.25 billion) of Thai equities so far this month, while stock markets in South Korea and Taiwan have seen outflows worth US$19.71 billion (RM79.25 billion) and US$25.74 billion, respectively, exchange and LSEG data showed.
Uploaded by Chng Shear Lane
https://theedgemalaysia.com/node/797878
PHILIPPINE PESO HITS RECORD LOW; INDONESIA’S CENTRAL BANK UNVEILS SUPPORT MEASURES
BENGALURU (March 30): The Philippine peso sank to a record low on Monday, while the Indonesian rupiah narrowly avoided its historic 17,000-per-dollar low as the country’s central bank introduced a new tool for banks to manage foreign-currency liquidity.
Several emerging Asian markets, especially India, Thailand and the Philippines, have been hit hard by the US-Israeli war on Iran as surging oil prices stoke concerns about inflation and wider current account deficits.
Analysts at HSBC noted that terms of trade pressures could still worsen for net energy-importing currencies, with another source of pressure being portfolio flows.
The Philippine peso hit a low of 60.801 per dollar, while stocks in Manila tumbled 1.7% as the net oil-importing country grapples with an “imminent danger of a critically low energy supply”.
Indonesia, another oil-importing country, sees sustained foreign fund outflows due to concerns about the impact of elevated oil prices, adding to persistent concerns over fiscal and governance risks.
Foreign investors have pulled out 21.37 trillion rupiah (US$1.26 billion or RM5.1 billion) from Indonesia’s stock markets so far this month, the largest outflow in at least over a decade, according to LSEG data.
Stocks in Jakarta slid as much as 2.1%, taking losses for the month to nearly 14% and putting them on track for their worst monthly performance since March 2020. The benchmark gauge has been the worst performer in the region this year.
Its currency, the rupiah, was last quoted around 16,985 a dollar, a stone’s throw from its record low of 17,000.
Bank Indonesia on Monday rolled out new FX repo operations using its foreign currency-denominated securities, providing banks with another option to manage liquidity, particularly in foreign exchange.
“The instruments function as high-quality, short-term collateral: Banks obtain the dollars they need, repay the loan when cash returns, while the collateral stays on the balance sheet,” said Wei Li, head of multi-asset investments at BNP Paribas.
“The repo’s market-neutral design limits immediate pressure on the IDR/USD rate, unlike a direct spot sale that would inject rupiah liquidity.”
Elsewhere in emerging markets, Malaysia’s benchmark stock index dipped 1.5%, while stocks in South Korea and Taiwan closed down 3% and 1.8%, respectively.
Among other regional currencies, the Taiwan dollar weakened to 31.996 per dollar, while South Korea’s won fell to 1,521.10 per dollar in intraday trade, its lowest since March 10, 2009.
Foreign investors have pulled out 34.71 billion baht (US$1.06 billion or RM4.25 billion) of Thai equities so far this month, while stock markets in South Korea and Taiwan have seen outflows worth US$19.71 billion (RM79.25 billion) and US$25.74 billion, respectively, exchange and LSEG data showed.
Uploaded by Chng Shear Lane
https://theedgemalaysia.com/node/797878