Emerging Markets: Rupiah hit by fourth rate cut, FinMin exit sinks baht

UOL

16/07/2020 09:09

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh
    * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA
    * Thai baht hits over 1-month low
    * Bank Indonesia cuts rates by 25 bps to 4.00%

    By Shriya Ramakrishnan
    July 16 (Reuters) - The Indonesian rupiah retreated on
Thursday after central bank officials cut interest rates by
another quarter point, while the Thai baht sank following the
surprise departure of its finance minister in an Asian morning
marked by a dramatic dive in Chinese shares. 
    Bank Indonesia (BI) cut its benchmark interest rate to
4.00%, the lowest since at least 2016 and in line with a slim
majority of analysts in a Reuters poll, as it strives to do more
to prop up an economy sliding towards recession.  urn:newsml:reuters.com:*:nJ9N2C202T
    The move follows the launch of a $40 billion financing
scheme earlier this month which also includes central bank bond
buying.  urn:newsml:reuters.com:*:nL4N2ED2BW
    "(The bank) has shifted towards growth support ... cutting
rates over two consecutive meetings," said Wei Liang Chang, a
macro strategist at DBS Bank. 
    "Lower rates may induce outflow pressures on the rupiah,
especially if liquidity is to expand with BI’s government debt
purchases."
    In military-controlled Thailand, the baht  THB=TH  weakened
as much as 0.8% to 31.74 per dollar and the benchmark stock
index  .SETI  dropped 0.5%, after finance chief Uttama
Savanayana and two other ministers resigned.
    The shake-up comes as the government rolls out billions of
dollars of stimulus measures to support an ailing economy
through the coronavirus pandemic at a time when investors are
also eyeing its choice for the next governor of the Bank of
Thailand.  urn:newsml:reuters.com:*:nL3N2EN1D0
    Thai Prime Minister Prayuth Chan-ocha said the cabinet
reshuffle would take place by next month, having earlier said it
would happen in September.
    "Political noise does not bode well for consumer and
business sentiment," said Tim Leelahaphan, economist at Standard
Chartered Bank. 
    "While the government has sufficient borrowing room to
support the economy, political stability is crucial – especially
with the fiscal package being rolled out." 
    Chinese stocks  .SSEC  were the worst performers, plunging
about 4.5% as concerns about deteriorating U.S.-China relations
took some of the shine off better-than-expected economic growth
data.
    Philippine stocks  .PSI , however, gained as investors
picked up blue-chip stocks after losses this month which have
outstripped other Asian markets. The Manila benchmark index
closed about 2.2% higher after steep declines a day earlier.  
    
    HIGHLIGHTS:
    
    ** Indonesian 3-year benchmark yields are down 2.9 basis
points at 5.867%
    ** In the Philippines, top index gainers are Bloomberry
Resorts Corp  BLOOM.PS  up 12.48% at 7.48 peso, First Gen Corp
 FGEN.PS  up 6.28% at 23.7 peso, Megaworld Corp  MEG.PS  up ​
5.33% at 3.16 peso
    ** Top losers on the Singapore STI  .STI  include CapitaLand
Commercial Trust  CACT.SI  down 2.79% at S$1.74; Genting
Singapore Ltd  GENS.SI  down 2.55% at S$0.765; UOL Group Ltd
 UTOS.SI  down 1.73% at S$6.83
    
    
  Asia stock indexes and                                      
 currencies at   0758 GMT                                
 COUNTRY   FX RIC          FX   FX YTD    INDEX  STOCKS  STOCK
                      DAILY %        %            DAILY  S YTD
                                                      %      %
 Japan      JPY=        -0.03    +1.55   .N225    -0.76  -3.75
 China                                                  
 India      INR=IN      -0.06    -5.07   .NSEI     0.31  -12.4
                                                             7
 Indonesi   IDR=        +0.10    -4.67   .JKSE     0.39  -19.1
 a                                                           1
 Malaysia   MYR=        -0.19    -4.19   .KLSE    -0.76  -0.96
 Philippi   PHP=        -0.20    +2.26   .PSI      2.18  -21.3
 nes                                                         4
 S.Korea                                                
 Singapor   SGD=        -0.24    -3.43   .STI     -0.88  -18.5
 e                                                           3
 Taiwan     TWD=TP      +0.02    +1.80   .TWII    -0.37   1.34
 Thailand   THB=TH      -0.51    -5.50   .SETI    -0.48  -14.6
                                                             9
 
 (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by
Patrick Graham)
 ((Shriya.Ramakrishnan@thomsonreuters.com; +91 8061822842 ;))