Indonesian rupiah leads gains among Asian currencies; stocks down

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Asian currencies appreciated against

the dollar on Friday as marginal weakness in the U.S. dollar

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powered gains across the region, with the Indonesian rupiah

leading the pack on potential further rate hikes to control

inflation.

The rupiah extended gains into a third session to

appreciate almost 1%, eyeing its best week since November 2020,

after inflation data on Thursday showed some signs of cooling

but stayed above the central bank’s target range of 2% to 4%.

Stocks in Jakarta lost 0.5%, tracking their worst

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week since mid-October.

To tame inflation, which is near its highest rate in seven

years, Bank Indonesia has lifted interest rates by a total of

175 basis points (bps) this year, stating that further moderate

rate hikes will be needed to bring it under control.

“We keep our forecast for BI to continue hiking (interest

rates) to reach its terminal level of 6% in the first quarter of

2023,” said Enrico Tanuwidjaja, an economist at UOB.

Elsewhere, the Singapore dollar and South Korean won

appreciated 0.12% each, adding over 1.6% and 0.6%

this week, respectively.

Malaysian ringgit firmed 0.2% on Friday, marking its

fourth straight week of gains, while stocks in Kuala Lumpur

gave up 0.6%, losing 0.3% in value this week.

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Philippine’s peso jumped 0.5% to mark its fifth

straight day of gains, while stocks led losses across

Asia with a 1.9% decline.

The sharp moves come after the country’s central bank

governor said it will hike interest rates this month, with the

monetary board likely split between a 25 and 50 bps adjustment.

The Bangko Sentral ng Pilipinas is slated to meet on Dec. 15.

Meanwhile, the International Monetary Fund flagged rising

inflationary pressures and China’s economic slowdown as risks to

Asia’s economic outlook, stating that aggressive tightening of

U.S. monetary policy may trigger abrupt reversals of capital

flows or sharp currency depreciation.

Stocks across Asia were subdued ahead of the U.S. non-farm

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payroll data for any more clues on the Federal Reserve’s rate

outlook. Stocks in South Korea and Singapore lost

1.4% and 0.7%, respectively.

HIGHLIGHTS:

** Indonesian 10-year benchmark yields falls 0.9 basis

points to 6.847%

** South Korea Nov inflation slows to 5.0%, lowest in 7

months

** The dollar index up 0.191% at 104.840 vs

Thursday’s low of 104.56

Asia stock indexes and currencies at

0433 GMT

COUNTRY FX RIC FX FX INDEX STOCKS STOCKS

DAILY % YTD % DAILY YTD %

%

Japan +0.10 -14.8 -1.83 -3.76

4

China +0.01 -9.92 -0.34 -13.33

India +0.09 -8.40 -0.52 7.84

Indonesia +0.78 -7.71 -0.51 6.13

Malaysia +0.18 -5.19 -0.63 -3.61

Philippine +0.50 -8.87 -1.89 -7.23

s

S.Korea +0.03 -8.52 -1.41 -17.89

Singapore +0.06 -0.26 -0.73 4.64

Taiwan +0.17 -9.50 -0.31 -17.85

Thailand -0.01 -3.98 -0.37 -0.92

(Reporting by Roushni Nair in Bengaluru; Editing by Kim

Coghill)