The Philippine peso fell for the eighth
straight session on Friday as markets feared a modest rate hike
by the country’s central bank may not be enough to curb surging
inflation, while other Asian currencies rose against a weaker
The Bangko Sentral ng Pilipinas (BSP) stuck to a 25 basis
point increase to its benchmark rate on Thursday for a second
month in a row, fearing that more aggressive tightening could
“Concerns over gradual pace of BSP hikes, weaker budget
balance, as well as policy uncertainty under the new president
could be adding to PHP drags in the interim,” Maybank analysts
said in a note.
The peso was on track for its worst week since June
2013. It was down 2% during the week, and hovered at a more than
16-1/2-yr intraday low notched earlier in the week.
The Thai baht was 0.1% weaker intraday, touching a
more than five-year low, likely pressured by portfolio outflows,
according to Maybank analysts.
Thailand’s central bank had signaled a gradual hike in its
benchmark interest rate amid a slow economic recovery and a
The Malaysian ringgit was unchanged even as data
showed a higher-than-estimated acceleration in May inflation.
Indonesia’s rupiah fell 0.1%, after Bank Indonesia
held rates steady at a record low on Thursday, sticking to its
“BI’s (Bank Indonesia) future rate action would be purely
data dependent, confident as it is about extremely limited
prospect of runaway inflation surge. We continue to expect the
first rate hike during 3Q22,” Kunal Kundu, an economist with
Societe Generale said.
Asian markets have seen a meaningful shift higher in rate
hike expectations across the board in the recent months, with
Thailand and Indonesia lagging their peers.
“With the exception of the People’s Bank of China, we expect
all the other Asian central banks to tighten monetary policy by
the second half of this year,” a note from ANZ Bank said.
Other currencies broadly rose, supported by a weaker
greenback, with the South Korean won leading gains
with a 0.3% climb, followed by a 0.2% rise in the Singaporean
Meanwhile, recessionary fears intensified after gauges of
factory activity in Japan, Britain, the euro zone and United
States all softened in June.
Asian equities gained, tracking a solid jump in the Wall
Street indexes overnight.
Seoul’s benchmark index rose 2.5%, with shares in
Philippines, Taiwan, India up between
0.8% and 1.3%.
Stocks in Jakarta gained 0.6%, Thailand up
0.5%, with Singapore and Malaysia 0.4% higher.
** Indonesia sees a fiscal deficit within a range of 4-4.5%
of GDP due to stronger revenue performance, a finance ministry
** India’s central bank is on course to bring down prices
but the retail inflation rate is likely to remain above the top
end of its mandated target band until December, Governor
Shaktikanta Das said
** China’s central bank on Friday injected 60 billion yuan
worth of seven-day reverse repos into the banking system, as
demand for cash for the end of the first half of the year
started to pick up
Asia stock indexes and
currencies at 0456 GMT
COUNTRY FX RIC FX FX INDE STOCKS STOCK
DAILY YTD % X DAILY S YTD
% % %
Japan +0.14 -14.5 <.n2>
India +0.06 -5.01 <.ns ei>
Indones -0.07 -4.01 <.jk ia se>
Malaysi +0.00 -5.45 <.kl a se>
Philipp -0.60 -7.05 <.ps ines i> 7
Singapo +0.15 -2.80 <.st re i>
Taiwan +0.12 -6.91 <.tw ii> 7
Thailan -0.14 -6.08 <.se d ti>
(Reporting by Savyata Mishra in Bengaluru; Editing by Kim
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