The Philippines’ peso was set for its sharpest loss in a week on Friday after its central bank signalled it was in no hurry to raise interest rates, while stocks eased after the country’s current account deficit projection was hiked.
Other regional currencies came under pressure from safe-haven flows buoying the US dollar as risk sentiment slightly eased after the US Federal Reserve hiked interest rates this week, and as a jump in oil prices subdued assets in the net energy importing region.
The Malaysian ringgit and the Singapore dollar gave up 0.2%, in line with losses in the Chinese yuan.
Bangko Sentral ng Pilipinas (BSP) said on Thursday it does not have to follow the Fed’s lead in raising rates but was closely monitoring inflation risks, ahead of a policy meeting on March 24.
“BSP Governor has stuck to script, indicating he’ll wait until the second half of the year before hiking, but by then Philippines will likely be behind the curve,” said Nicholas Mapa, a senior economist at ING.
Asian FX, stocks rattled by escalating Russia-Ukraine tensions
Mapa said the BSP’s stance to continue making data-driven monetary policy decisions while monitoring the risk to inflation outlook was pushing the peso further lower.
The currency, which has fallen 0.2% so far this week, skidded 0.5%.
Stocks in Manila, which have seen volatile trading since Russia’s invasion of Ukraine, fell 0.7% and were set for a second straight weekly loss, with pressure exacerbated after the BSP widened its deficit forecast for this year.
In Indonesia, the rupiah dropped 0.3%, a day after Bank Indonesia held interest rates at a record low and ruled out a need to tighten policy until there was a fundamental increase in inflation.
Stocks in Jakarta gave up 0.4% to lead losses in the region.
Indonesia on Thursday made a surprise policy U-turn to remove export volume curbs on palm oil products and raise its export levy instead to control domestic cooking oil prices.
Other markets in the region also consolidated following the previous session’s relief rally when sentiment around a hawkish tilt by the Fed was overtaken by its view that policy tightening would not hinder growth, and as oil prices jumped.
Taiwan’s central bank surprised markets by raising its benchmark interest rate on Thursday and by a much bigger margin than a few analysts had expected, leading its dollar to climb 0.7%.
Highlights:
** Top gainers on the Singapore STI include Hongkong Land Holdings Ltd up 2.85%, Capitaland Investment Ltd up 2.15%, Keppel Corporation Ltd up ?1.62% at
** Top gainers on the Thailand’s SETI include Ramkhamhaeng Hospital PCL up 11.54%, Baan Rock Garden PCL up 10.59% and, Thonburi Healthcare Group PCL up 6.3%
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