Thai baht unchanged after c.bank hikes rates; Singapore stocks rally

Article content

The Thai baht was broadly unchanged on Wednesday after the

country’s central bank hiked interest rates as expected and

Article content

hinted at further adjustments, while Singapore shares hovered

near a nine-month high after inflation data.

The baht – Asia’s best-performing currency so

far this year – edged 0.1% lower with the Bank of Thailand (BoT)

saying

any further rate hikes would be gradual and measured, but

it stood ready to adjust.

“Expanded policy space from THB rebound does leave the door

Article content

open for a pause predicated on elevated debt vulnerabilities,”

said Vishnu Varathan, an analyst at Mizuho Bank.

Foreign visitors to the country surged in 2022 from a year

ago, with the country’s vital tourism sector set for a further

boost from a recently approved $120 million budget.

China’s abrupt dismantling of its strict COVID measures has

driven a recovery in risk appetite in Asia in recent weeks, with

Thailand, Singapore and Malaysia emerging as the top

beneficiaries.

Malaysia’s ringgit rose 0.4%, the South Korean won

firmed 0.3% and the Indian rupee was up

marginally by 0.1%.

Singapore’s dollar rose 0.4% with data showing

December core inflation came in slightly higher than the

forecast.

“Our view for the Monetary Authority of Singapore (MAS) to

Article content

further tighten monetary policy in April 2023 remains

unchanged,” said Barnabas Gan, senior economist at RHB

Singapore.

Investor focus will be on the country’s budget on Feb.

14 for hints on medium-term priorities for the economy, Maybank

said in a note.

The dollar index weakened in Asia after data showed

U.S. business activity shrank for a seventh straight month.

Markets expect a 25 bps rate hike from the Federal Reserve in

February.

Most regional markets resumed trading after a

holiday-extended weekend, though China, Taiwan and Hong Kong

remained shut.

The Pakistani rupee fell by 1.2% against the U.S.

dollar after foreign exchange companies removed an upper cap on

the currency, saying it was creating “artificial” distortions in

Article content

the market.

Meanwhile, Sri Lanka’s central bank held interest rates

steady in a widely expected move, saying the prevailing tight

monetary stance is crucial to taming still-high inflation and

restoring economic stability.

Indonesia’s rupiah slipped 0.5%, reversing a sharp

1.2% jump on Tuesday. The country’s central bank last week

signaled an early end to its tightening cycle.

Asian equities rose even as the extended market closure in

China capped volumes. MSCI’s broadest index of Asia-Pacific

shares outside Japan advanced 0.2%, holding

below a seven-month peak.

Singapore’s Straits Times index was 1.5% higher after

earlier hitting its highest since May 5 and Seoul shares

climbed 1.4%.

Philippines stock rose 0.6% after a delayed opening

Article content

on Wednesday due to a technical issue, while the Thai stocks

were steady at 0.2%.

Indian shares fell 1.2%, Jakarta stocks were

down 0.5% and Malaysian shares declined 0.2%.

HIGHLIGHTS:

** Thailand’s central bank raised its key interest rate by

25 basis points on Wednesday, as it attempts to curb high

inflation even as the return of Chinese tourists brightens the

country’s economic growth prospects

** Indonesia’s foreign direct investment surged 44.2% on a

yearly basis in 2022, the investment minister said on Tuesday,

noting 2023 would be a more difficult year to attract investment

** Thailand’s exports contracted more than expected in

December and only modest growth was expected for 2023 with a

strong baht currency hurting trade competitiveness, the commerce

ministry said

Asia stock indexes and

currencies at 0725 GMT

COUNTRY FX RIC FX FX INDE STOCK STOCK

DAILY YTD % X S S YTD

% DAILY %

%

Japan -0.16 +0.58 <.n2>

China EC>

India +0.08 +1.31 <.ns ei>

Indones -0.50 +4.04 <.jk ia se>

Malaysi +0.45 +3.19 <.kl a se>

Philipp +0.04 +2.05 <.ps ines i>

S.Korea 11>

Singapo +0.33 +1.88 <.st re i>

Taiwan -0.12 +1.12 <.tw ii>

Thailan -0.14 +5.46 <.se d ti>

(Reporting by Savyata Mishra in Bengaluru; Editing by Eileen

Soreng)