Philippine peso on track for worst week in 9 yrs, Asian stocks gain

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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

U.S. dollar.

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

compromise growth.

“Concerns over gradual pace of BSP hikes, weaker budget

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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

weakening currency.

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

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held rates steady at a record low on Thursday, sticking to its

dovish stance.

“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

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greenback, with the South Korean won leading gains

with a 0.3% climb, followed by a 0.2% rise in the Singaporean

dollar.

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.

HIGHLIGHTS:

** Indonesia sees a fiscal deficit within a range of 4-4.5%

of GDP due to stronger revenue performance, a finance ministry

official said

** India’s central bank is on course to bring down prices

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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>

China EC>

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

S.Korea 11> 9

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

Coghill)