EMERGING MARKETS - Malaysian ringgit around 26-yr-low; Indonesia policy awaited
Malaysia's ringgit hovered around 26-year lows on Wednesday while other emerging Asian currencies strengthened marginally, as investors awaited Indonesia's interest rate decision later in the day.
The ringgit MYR= edged up 0.1% by midday, recovering marginally but still near its lowest levels since January 1998, which it hit on Tuesday.
Malaysia's central bank, taking stock of the slide, reassured markets by saying that the unit's recent performance was largely due to external factors and did not reflect the health of the country's economy.
"Some of these (external) factors include market adjustment to changing U.S. interest rate expectations, geopolitical concerns and uncertainty surrounding China’s economic prospects," said Bank Negara Malaysia chief Abdul Rasheed Ghaffour in a statement.
The South Korean won KRW=KFTC and the Philippine peso PHP= rose as much as 0.4% and 0.2%, respectively.
The Indonesian rupiah IDR= was largely flat, while local stocks. JKSE were 0.7% lower, ahead of the key interest rate decision.
Bank Indonesia is expected to keep its key policy rate unchanged over subdued inflation and an improving outlook for the currency, according to a Reuters poll of economists who predicted the first rate cut to come next quarter.
"The economic growth is expected to accelerate after a discount of the policy rate by the central bank," said analysts at Maybank.
Stocks in the region also eased as diminishing expectations of early interest rate cuts from the Federal Reserve sapped risk appetite. MKTS/GLOB
The Fed will release minutes of its last meeting later in the day, though they have been overtaken by high readings for consumer and producer prices.
In Thailand, data on Monday showed the economy unexpectedly contracted in the fourth quarter of 2023. Prime Minister Srettha Thavisin said the economy was in a critical stage the following day and again urged the central bank to cut interest rates without waiting for a scheduled meeting.
The Bank of Thailand has previously said cutting interest rates would do little to help the economy unless structural issues are resolved.
Thailand's stock market. SETI was up as much as 1% and the baht THB=TH gained as much as 0.3% after hitting it lowest level since Nov. 2023 in the last session.
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