The Thai baht rebounded against the dollar on Tuesday after the central bank said it expected steady foreign fund inflows, while the Indonesian rupiah extended its recent slide as investors took profits from a strong rally last year. Bank of Thailand Deputy Governor Atchana Waiquamdee also told a seminar she was not overly concerned about food inflation at the moment, easing some concerns among foreign investors.
"Foreign investors are definitely still worried about inflation, particularly in countries that have yet to hike interest rates," said Pin Ru Tan, emerging markets forex and rates strategist at the Royal Bank of Scotland in Singapore. Still, the outlook for Asian currencies for the year remains bright because regional economies are expected to outperform the euro zone, helped by a stronger US economy, analysts and dealers said.
The baht earlier weakened to 30.84, the softest since September 24, on offers from foreign banks. Thailand's central bank is expected to raise its benchmark interest rate by another quarter point to 2.25 percent on Wednesday to curb inflationary pressure. Foreign investors have sold a net $147.6 million in stocks so far this year.
The rupiah fell to as weak as 9,088 per dollar, the weakest since July 6 last year on stock and bond outflows. But it erased much of its losses as the country's central bank was spotted selling dollars to check the currency's falls amid 9,070-9,090 levels and on the euro's rebound. The Taiwan dollar rose 2 percent along with a jump in the local stock market.
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