Asian currencies: Indonesian rupiah touches lowest since Nov 1

BENGALURU: Indonesia’s rupiah and stocks hit multi-month lows on Monday after stronger-than-expected inflation data, while other Asian stock markets gained as upbeat China manufacturing data stoked optimism about demand in the world’s second largest economy.

The rupiah fell as much as 0.4% to 15,910 per US dollar, its lowest since Nov. 1, prompting intervention by the Bank Indonesia (BI) to arrest further declines.

The Indonesian benchmark stock index fell 1.8% to its lowest since Jan. 30 as data showed that annual inflation last month rose at the quickest pace in seven months.

The Indonesian central bank is focused on currency volatility and left its policy rate unchanged at 6% for the fourth consecutive meeting in February. It is likely to maintain a cautious approach to policy easing, and wait for the US Federal Reserve to cut interest rates first.

Other Asian currencies were largely subdued, with the Singapore dollar up 0.1%. The Thai baht slipped 0.1%, while the Taiwanese dollar was unchanged. The Indian forex market was closed for a bank holiday.

Asian stock markets advanced on prospects of a recovery in Chinese demand after data showed that manufacturing activity expanded at the fastest pace in 13 months last month.

Stocks in China jumped 1%, hitting their highest since March 22. India’s blue-chip NSE Nifty 50 index rose as much as 0.91% to a record high of 22,529.95.

Shares in Singapore, the Philippines and Malaysia rose between 0.4% and 1.1%. “China’s PMI holding up is offering some reasons (for Asian FX) to be optimistic,” said Christopher Wong, OCBC’s currency strategist. At 0644 GMT, the yuan was trading 0.1% lower at 7.23 per US dollar, hovering at its lowest level since Nov. 17.