Thursday after the country’s central bank left interest rates at
a record low, while the Philippine peso hovered near its lowest
level in 16-1/2 years following a 25-basis-point rate hike.
The rupiah was 0.2% higher, clinging to its earlier
levels after Bank Indonesia (BI) acted as widely expected,
balancing the need to support economic growth while maintaining
stability in the currency.
The BI’s decision will put further pressure on the currency,
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said Fakhrul Fulvian, an economist at Trimegah Securities.
“Stability in IDR can only be achieved once BI clearly
states its intention to start the tightening cycle seriously,”
he said.
“Commodity windfall, rupiah’s relative outperformance as
well as a higher subsidy budget have provided room for the BI to
bide time and not join regional peers, for instance the
Philippines, in tightening policy reins,” said Radhika Rao,
senior economist at DBS Bank.
Meanwhile, the Philippine central bank turned more hawkish,
pledging to take “all necessary policy actions” to stamp down
inflation, which is running at a more than three-year high.
The peso dropped as much as 0.6% after the rate
decision, even as investors weighed the modest hike against a
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higher inflation forecast by the central bank.
Bangko Sentral ng Pilipinas (BSP) incoming Governor Felipe
Medalla had said he aimed to raise rates at a measured pace
beyond August.
“We continue to expect the BSP to tighten another 150bp in
this hiking cycle with a cumulative 100bp hikes this year and
50bp in Q1 2023 bringing the policy rate to a terminal rate of
4%,” Goldman Sachs analysts said.
Emerging Asian central banks have tried to keep pace with
the recent tightening by the U.S. Federal Reserve, but have
fallen behind the curve as concerns around the economic pain
associated with aggressive rate hikes abound.
Among other regional currencies, the South Korean won
and the Thai baht slipped 0.3% each while
the Malaysian ringgit was flat.
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The Singaporean dollar weakened 0.3% after its
inflation reading came in at a more than 10-year high,
increasing the odds of a further inter-cycle tightening in
October.
“We note the risk of an earlier-than-expected inter-meeting
move, our base case remains for the Monetary Authority of
Singapore to further tighten FX policy in October with a 50bp
slope increase,” Barclays analysts said in a note.
The Indian rupee pared early gains to trade flat.
Global risk sentiment remained fragile after Fed chairman
Jerome Powell pledged full commitment to bring prices under
control, despite the risks of an economic downturn. Markets are
pricing in another 75-basis-point increase in July.
“Ahead, a series of purchasing managers index (PMI) readings
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from major economies will be on close watch to provide fresh
update on economic conditions,” Yeap Jun Rong, market strategist
at IG, said in a note.
Equity markets wobbled, with shares in Philippines
down 1.7%, Taiwan shares and South Korea losing
more than 1% each.
Jakarta shares reversed course to gain 0.2% after
the rate decision, while those of India and Singapore
rose 0.4% and 0.3%, respectively.
HIGHLIGHTS:
** Thailand’s inflation will remain elevated this year, but
should fall back into the central bank’s target range of 1% to
3% in the second quarter of next year, a bank official said on
Thursday.
** Indonesian 10-year benchmark yields are down 5.7 basis
points at 7.437%.
** Singapore’s 10-year benchmark yield is down 4.7 basis
points at 2.98%.
Asia stock indexes and currencies
at 0815 GMT
COUNTRY FX RIC FX FX INDEX STOCKS STOCK
DAILY YTD % DAILY % S YTD
% %
Japan +0.47 -15.1 0.08 -9.10
5
China
India +0.04 -5.14 -0.14 -11.3
1
Indonesia +0.20 -3.94 0.20 6.33
Malaysia -0.05 -5.47 -0.07 -8.77
Philippines -0.57 -6.73 -1.67 -14.8
5
S.Korea 8
Singapore -0.24 -2.96 0.21 -0.77
Taiwan +0.03 -7.02 -1.12 -16.7
0
Thailand -0.39 -5.88 0.12 -5.77
(Reporting by Savyata Mishra in Bengaluru; Editing by Sherry
Jacob-Phillips)
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NEW YORK, June 25, 2022 (GLOBE NEWSWIRE) — Mercer International Inc. (“Mercer” or the “Company”) (Nasdaq: MERC) is deeply saddened to announce that an employee has passed away at its Rosenthal mill in Germany on June 25, 2022. Mercer and local authorities conducted an investigation and so far determined that the tragic loss was not work related. Mercer’s emergency procedures were immediately activated, local authorities were notified and industrial safety and occupational health personnel were involved for support.
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