The Philippine peso hit a record low and
other Asian currencies fell against the greenback on Monday as
Russia’s indefinite closure of its main gas supply pipeline to
Europe and extended COVID curbs in China bolstered the
Shares across Asia also lost ground, while the euro sunk to
a two-decade low.
“Haven demand was arguably triggered by headline
geo-political risk dimensions to a more aggressive posture by
Russia in suspending gas supplies to Europe,” said Vishnu
Varathan, head of economics and strategy at Mizuho Bank.
The peso declined 0.1%, while the Taiwanese dollar
and Singapore dollar lost between 0.2% and 0.5%.
Vietnam’s dong dropped 0.4% to hit a near
two-and-half-year low after an extended holiday weekend.
Riskier emerging market assets have come under immense
pressure recently, with markets pricing a more hawkish response
from central banks since the Jackson Hole symposium last month.
Among other Asian currencies, South Korea’s won
slid 0.7% to hit its lowest level since April 2009.
In China, COVID-19 outbreaks and a gloomy growth outlook
have further dampened risk sentiment.
The yuan has declined over 9% this year, and was
down 0.4% on Monday, hitting its lowest level since August 2020.
In Indonesia, subsidized fuel prices were hiked by about 30%
over the weekend. High energy subsidies had restrained
Indonesia’s inflation, allowing the central bank to delay
raising interest rates until last month, well behind regional
and global peers.
“For Bank Indonesia, the fuel price adjustment is a
considerable game changer, given that the fiscal inflation
shield is no more,” said Wellian Wiranto, an economist at OCBC
He expects the central bank to hike rates by at least
another 50 basis points over the rest of the year.
The rupiah dipped 0.1%, but stocks in Jakarta
Share benchmarks in Seoul and Manila dropped
0.4% and 0.6%, respectively, while those in Singapore and
Mumbai moved higher.
Shares in Thailand and the baht were both
weaker after the country reported that consumer price index
rose 7.86% in August from a year earlier, the fastest pace in
14-years, but in-line with expectations.
Bank of Thailand’s chair said that inflation is set to peak
in the third quarter and is likely to be more than 6% this year.
Over the week, Asia-focused investors will be looking out
for key inflation data from China, the Philippines and Taiwan,
as well as an interest rate decision from the Malaysian central
** China’s Shenzhen to adopt tiered COVID measures; Chengdu
** Yield on Indonesia’s 10-year benchmark bond
hits highest level since August 22
** S.Korea pledges pre-emptive action to stabilize markets
Asia stock indexes and currencies at 0409 GMT
COUNTRY FX RIC FX FX YTD INDEX STOCK STOCKS
DAILY % S YTD %
Japan -0.10 -18.00 -0.10 -4.06
China -0.44 -8.33 0.10 -12.37
India -0.05 -6.90 0.35 1.42
Indonesia -0.15 -4.47 0.52 9.62
Malaysia -0.07 -7.16 -0.04 -4.91
Philippines -0.11 -10.45 -0.50 -6.50
S.Korea -0.58 -13.26 -0.29 -19.32
Singapore -0.23 -3.95 0.25 2.88
Taiwan -0.49 -9.92 0.03 -19.44
Thailand -0.11 -9.14 -0.30 -2.43
(Reporting by Harish Sridharan in Bengaluru; Editing by Edwina