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EM ASIA FX-Indonesian rupiah firms on measures to shore up dollar supply

Published 04/09/2020, 03:00 PM
Updated 04/09/2020, 03:10 PM
© Reuters.
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* Most Asian currencies subdued ahead of OPEC+ meeting
* Indonesian rupiah poised for 2.5% weekly gain
* Bank of Korea holds rates steady
* Philippine markets closed for holiday

(Adds text, updates prices)
By Anushka Trivedi
April 9 (Reuters) - The Indonesian rupiah gained 1% to a
more than two-week high on Thursday as investors cheered
measures by the central bank to shore up dollar supply, while
most other Asian currencies traded in a thin range.
The rupiah IDR= has been the worst hit Asian currency this
year, losing about 14% against the dollar, as investors fled
risky assets on worries over the coronavirus-induced economic
crisis and sought shelter in the greenback, the world's reserve
currency.
To stem the depreciation, the Indonesian central bank
unveiled a slew of measures over the last few days, including a
$4.3 billion bond issuance and clinching a $60 billion repo
facility deal with the U.S. Federal Reserve. The repo deal received a "solid reception" from investors
and sparked a rally, said Wei-Liang Chang, a macro strategist at
DBS Bank.
"This suggests that U.S. dollar buffers in Indonesia will be
substantially enhanced," he added.
The rupiah was on track to post a weekly gain of 2.5% after
falling for four straight weeks. Most Asian markets will be
closed on Friday for a holiday.
Meanwhile, other Asian currencies were subdued despite hopes
that the coronavirus pandemic may be nearing its peak, as
investors exercised caution ahead of a crucial meeting by oil
producers to discuss output cuts.
Some commodity-linked currencies like the Australian dollar
AUD=D4 and global equities jumped after a New York state
official said social distancing measures were helping to contain
the virus and the U.S. president said he would reopen the
economy with a "big bang". MKTS/GLOB
The dollar fell marginally against its peers and was down
about 0.5% for the week. .DXY
However, the dollar's weakness failed to buoy most Asian
currencies, with the Chinese yuan CNY=CFXS , the Thai baht
THB=TH and the Singapore dollar SGD= trading little changed.
"Markets appear to be pumped about pain relief in its many
guises, be it declining rate of infection leading to relaxing
social distancing, stimulus cushion or price stability," Mizuho
Bank analysts said in a note.
"But a closer look reveals that markets are not quite primed
for a resounding recovery either," they added, referring to the
possibility of a second wave of infections.
The Malaysian ringgit MYR= firmed to a one-week high, in
tandem with gains in crude prices. Malaysia, being a net oil
exporter, sees impact to its currency from crude price
volatility.
India, the world's third-largest oil consumer, saw its
currency INR=IN weaken by 0.2%.
Crude futures rose on expectations that OPEC and allies
would agree to cut production at a meeting later in the day as
the industry grapples with the coronavirus-driven collapse in
oil demand. O/R
The South Korean won KRW=KFTC firmed 0.2%, extending gains
into a fourth session to touch a near two-week high, after the
Bank of Korea held rates steady.
Philippine markets were closed for a public holiday.

The following table shows rates for Asian currencies against
the dollar at 0522 GMT.

CURRENCIES VS U.S. DOLLAR
Currency Latest bid Previous day Pct Move
Japan yen 108.940 108.81 -0.12
Sing dlr 1.426 1.4252 -0.02
Taiwan dlr 30.093 30.160 +0.22
Korean won 1217.600 1220.9 +0.27
Baht 32.790 32.785 -0.02
Rupiah 15990.000 16150 +1.00
Rupee 76.490 76.37 -0.16
Ringgit 4.337 4.345 +0.18
Yuan 7.066 7.0651 -0.01

Change so far in 2020
Currency Latest bid End 2019 Pct Move
Japan yen 108.940 108.61 -0.30
Sing dlr 1.426 1.3444 -5.69
Taiwan dlr 30.093 30.106 +0.04
Korean won 1217.600 1156.40 -5.03
Baht 32.790 29.91 -8.78
Rupiah 15990.000 13880 -13.20
Rupee 76.490 71.38 -6.68
Ringgit 4.337 4.0890 -5.72
Yuan 7.066 6.9632 -1.45

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