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EMERGING MARKETS-Most Asian currencies weaken as Turkish lira's slide weighs on risk sentiment

Published 03/22/2021, 12:34 PM
Updated 03/22/2021, 12:40 PM
© Reuters.
USD/JPY
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USD/SGD
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USD/MYR
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USD/PHP
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JKSE
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TWII
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SETI
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PSI
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STI
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* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
* Spillover impact of lira's slump limited- analyst
* Philippine, Thai c. banks to meet later in the week
* India reports biggest daily jump in COVID-19 cases in 4
months

By Shruti Sonal
March 22 (Reuters) - Most emerging Asian currencies edged
weaker on Monday, with investors slightly unsettled by a slump
in Turkey's lira after President Tayyip Erdogan sacked a hawkish
central bank governor, replacing him with a critic of high
interest rates. As markets opened, Turkey's lira plunged 15% to near its
all-time low in reaction to President Tayyip Erdogan's removal
of Governor Naci Agbal over the weekend. The Indonesian rupiah IDR= weakened 0.2% against the
dollar, while the Philippine peso PHP= and the Thai baht
THB=TH dropped 0.1% each.
"The slide in the lira will probably have only a limited
spillover impact into Asia. What is happening in Turkey is very
country-specific and doesn't really have any direct bearing on
Asia," said Khoon Goh, head of Asia research at ANZ Banking
Group.
"The immediate knee jerk reaction has been a bit of a
risk-off mood during Asian trading session. But I don't see any
longer-term impact. Once the market digests the news, the
trading in Asia is likely to reflect the region's overall
fundamentals".
Bucking the trend, South Korean won KRW=KFTC strengthened
slightly after preliminary data showed the country's exports
during the first 20 days of March jumped 12.5% from a year
earlier, when the country was still dealing with its first
outbreaks of the coronavirus.
Investors also eyed central bank meetings in the region
later in the week. Unlike other emerging economies like Russia
and Turkey, which have already embarked on a monetary tightening
cycle, Asian central banks have stood pat on rates.
Last week, Indonesia and Taiwan kept their key interest rate
steady, while central banks in Philippines and Thailand are also
expected leave rates unchanged at their meetings during the
week.
"I expect Asian central banks to keep their rates on hold
for quite some time", Khoon said, adding that there's no
pressure on any central bank in Asia to hike rates.
"The fundamentals here are very different from what we're
seeing in Turkey and Russia."
Safe-haven currencies like the Japanese yen JPY= and the
U.S. dollar USD= strengthened, pointing towards a "risk off"
environment.
Equities presented a mixed front. Indonesian .JKSE and
Thai shares .SETI fell 0.6% and 0.3% respectively, while
Singapore .STI and Taiwan .TWII climbed 0.4% each.
A spike in COVID-19 cases in the region remained a cause of
concern. India reported its biggest daily jump in cases in four
months on Sunday, while Philippines is set to expand tighter
COVID-19 rules and restrict travel to battle a renewed surge in
infections. Sino-U.S. tensions continued to weigh on sentiment as U.S.
and Chinese officials concluded on Friday what Washington called
"tough and direct" talks in Alaska.


Asia stock indexes and
currencies at 0400 GMT
COUNTRY FX RIC FX FX INDEX STOCKS STOCKS
DAILY YTD % DAILY YTD %
% %
Japan JPY= +0.10 -5.08 <.N225 -2.00 6.39
>
China S> >
India INR=IN +0.00 +0.77 <.NSEI -0.59 4.83
>
Indonesi IDR= +0.00 -2.50 <.JKSE -0.58 5.69
a >
Malaysia MYR= -0.05 -2.12 <.KLSE -0.14 -0.20
>
Philippi PHP= -0.14 -1.15 .PSI -0.28 -10.10
nes
S.Korea C> >
Singapor SGD= -0.07 -1.61 .STI 0.36 10.62
e
Taiwan TWD=TP -0.04 +0.03 <.TWII 0.46 9.58
>
Thailand THB=TH -0.10 -2.92 <.SETI -0.25 7.64
>



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