EMERGING MARKETS-Ringgit leads Asia FX down; c. banks are concentrating

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Band Shashwat Awasthi

September 20 (Reuters)Malaysia’s ringgit was expected to experience its biggest intraday decline since July in thinning holiday trading on Monday and resulted in losses among regional currencies as the US dollar held steady at the start of a week that is expected to be dominated by central bank reports.

Regional stock markets fell sharply, drawing inspiration from broader Asian stocks, as Kuala Lumpur stocks .KLSE hit a low of nearly a month, while those in Indonesia .JKSE and the Philippines .PSI lose more than 1% each.

The dollar appreciated as investors waited for further signals from the Federal Reserve on weakening stimulus measures and escalating woes from indebted developer China Evergrande 3333.HK sapped risk appetite and led traders to the greenback. FRX /

Concerns over Evergrande’s ability to meet its impending payment obligations have cast a shadow over Asian markets in recent weeks as it poses broader risks to China’s financial system.

The ringgit MYR = lost about 0.4%. Former Malaysian Prime Minister Najib Razak, who was convicted of corruption, told Reuters on Sunday that he had not ruled out being re-elected to parliament, which increases the potential for political instability to come.

Malaysia’s traditional ruling party, the United National Organization of Malaysians, returned to power last month, after the coalition pitted ousted Prime Minister Muhyiddin Yassin and UMNO’s Ismail Sabri Yaakob was appointed in its place . Led by Najib, UMNO was defeated in the last elections in 2018, when voters turned against the corrupt party.

Indonesian Rupiah IDR = dropped 0.2%. The country’s central bank is expected to keep its key interest rate stable on Tuesday as the economy gradually reopens after a recent devastating wave of COVID-19.

“The Bank of Indonesia should keep the key rate unchanged and assure the markets that it remains focused on financial stability, thereby helping to contain any pressure on IDR risk premiums,” Barclays analysts said in a note.

In the Philippines, the peso PHP = lost 0.2%, ahead of a meeting of Bangko Sentral ng Pilipinas (BSP) this week.

“PHP may come under some pressure as BSP leaves rates unchanged, focusing on supporting growth while raising inflation expectations for 2021 still above its target range,” added analysts at Barclays.

Last week, BSP sharply reduced its current account surplus projection for this year and forecasts a deficit next year, citing risks associated with the emergence of highly transmissible variants of COVID-19.

Thai stocks .SETI fell 0.6% and the baht THB = TH hit its lowest level since Aug. 23, as some delays in last week’s report of a delay in reopening the capital Bangkok to tourists remained.

STRONG POINTS:

** 10-year Indonesian benchmark returns ID10YT = RR were up 3.8 basis points to 6.201%.

** Top loser of the Jakarta stock index .JKSE is Betonjaya Manunggal BTON.JK, down 6.9%.

** In the Philippines, the first loser of the benchmark is Alliance Global Group AGI.PS, down 5.4%.

Asian Stock Indices and Currencies at 0443 GMT

COUNTRY

FX RIC

DAILY FX%

FX YTD%

INDEX

DAILY STOCKS%

STOCKS YTD%

Japan

JPY =

+0.04

-6.07

.N225

0.00

11.13

India

INR = IN

-0.36

-0.92

.NSEI

-0.36

25.32

Indonesia

IDR =

-0.21

-1.51

.JKSE

-1.17

1.38

Malaysia

MYR =

-0.38

-3.97

.KLSE

-0.88

-5.68

Philippines

PHP =

-0.22

-4.27

.PSI

-0.97

-4.11

Singapore

SGD =

-0.16

-2.22

.STI

-0.45

7.51

Thailand

THB = TH

-0.36

-10.16

.SETI

-0.58

11.52

Chart: Global exchange rates https://tmsnrt.rs/2RBWI5E

Asian scholarshipshttps://tmsnrt.rs/2zpUAr4

(Reporting by Shashwat Awasthi; Editing by Simon Cameron-Moore)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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