BENGALURU: Asian markets wavered on Monday, with the Malaysian ringgit and Indonesian rupiah dipping slightly and stocks trading lower as investors await rate decisions this week from local central banks and the US Federal Reserve.
The rupiah weakened by as much as 0.2% to breach the psychologically significant 16,000 per US dollar threshold, potentially influencing Bank Indonesia’s (BI) monetary policy decision on Dec. 18, where it is expected to maintain interest rates.
The rupiah has declined more than 6% from its September peak despite central bank intervention, and is now at the forefront of policymakers’ concerns after four consecutive sessions of falls.
The Malaysian ringgit extended its six-session decline, falling 0.1% to its lowest since Dec. 4, under pressure from expectations of higher headline inflation in Friday’s data release.
While the Bank Negara Malaysia is likely to maintain rates at its Jan. 22 meeting, the absence of an explicit inflation target could provide room for potential rate cuts in 2025 if economic growth significantly decelerates, analysts said.
The South Korean won initially rose 0.5% following President Yoon Suk Yeol’s impeachment over the weekend, but later reversed course to fall 0.2% to 1437.5 by 0723 GMT, reflecting political uncertainty.
“The won may strengthen towards 1,400 in Q1, offering importers a window for FX risk hedging,” said Poon Panchibool, a markets strategist with Krung Thai Bank.
However, potential tariff hikes under the administration of incoming US President Donald Trump could weaken the won, he said.
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