BENGALURU (Sept 9): Indonesia’s rupiah hit a near four-month high on Wednesday, leading gains in emerging Asian currencies as the dollar weakened and investment inflows picked up.
An MSCI gauge of emerging-market currencies rose as much as 0.2% to a record high as the dollar weakened ahead of key US inflation data later this week.
The rupiah led regional gains, rising to 17,490 per dollar, its strongest level since mid-May.
The weaker global dollar and improving capital-flow environment drove the rupiah’s gains for the day, said Fakhrul Fulvian, chief economist at Trimegah Securities.
The rupiah is still down nearly 5% this year, making it one of the region’s worst-performing currencies.
It fell 5.2% in the second quarter, its biggest quarterly drop this year, as Southeast Asia’s largest economy faced an oil price shock and concerns over fiscal discipline, central bank independence and stock market regulation.
Indonesia still needs sizeable foreign inflows to maintain a comfortable external balance, Fulvian said.
“Our estimate remains around US$11 billion, so I would not say the rupiah’s vulnerability has disappeared.”
Elsewhere, Malaysia’s ringgit weakened to 4.0685 per dollar, hovering near its lowest level since mid-August.
In equities, MSCI EM Asia equities index, dominated by AI tech-heavy South Korea and Taiwan, rose as much as 1%.
South Korea’s Kospi ended 1.4% higher, its highest close since July 23, as chipmakers gained after the Philadelphia Semiconductor Index rose 1.3% overnight.
Chipmaker SK Hynix gained 3.5%, logging its fourth consecutive session of gains, while peer Samsung Electronics ended flat after gaining as much as 2%.
In Southeast Asia, Jakarta stocks fell as much as 0.7%, while those in Taipei ended 0.2% higher. Manila stocks gained 0.2%, while Thailand equities edged lower, and those in Malaysia were flat.
Regional equities, which are mostly reliant on energy imports, did not log steep losses even as oil prices rose above US$100 a barrel as conflict flared again in the Middle East.
The oil shock cannot be intepreted simply as risk-off for Asia, rather the same shock creates very different balance-of-payments effects across countries, said Fulvian.
“We need to ask who imports energy, who exports commodities, and which balance sheet ultimately absorbs the shock.”
Meanwhile, Singapore’s FTSE Straits Times Index shed as much as 1.1%, and was on track for its third consecutive session of losses.
“I see Singapore’s recent weakness partly as a consequence of its previous strength. After being one of Asia’s strongest markets, worsening global conditions naturally create some profit-taking and valuation adjustment,” said Fulvian.
The Singapore dollar was flat.
Elsewhere, the Thai baht edged higher, while the Philippine peso weakened slightly to 62.431 a dollar.
The won strengthened against the greenback to 1,335.70.
Uploaded by Chng Shear Lane
