Indonesia’s rupiah at record low

BENGALURU: South Korean stocks fell on Tuesday, snapping a 12-day winning streak as chipmakers slid on profit-taking, while the Indonesian rupiah hit a record low on concerns over central bank autonomy amid a widening fiscal deficit.

The KOSPI closed down 0.4 percent as Samsung Electronics and SK Hynix each fell more than 2 percent. The index remains up 16 percent this year, supported by AI-linked gains.

Taiwan stocks rose 0.4 percent to a record close, with TSMC up 0.9 percent.

Taipei’s top negotiator said Taiwan aims to build a “democratic” high-tech supply chain with the US and form an AI partnership, following a tariff deal last week.

In Indonesia, the rupiah slid to 16,985 per dollar, its weakest point on record, a day after the country’s top leader nominated his nephew to join the central bank’s board of governors.

Investors have been monitoring the fiscal situation of Southeast Asia’s largest economy since the abrupt sacking of the well-respected finance minister, Sri Mulyani Indrawati, in September. President Prabowo’s populist spending measures to boost growth, the nomination of his nephew, and a new burden-sharing agreement between the government and the central bank have aggravated concerns about Bank Indonesia’s autonomy.

“The markets have perceived this (nomination) rightly or wrongly to be a potential impact on Bank Indonesia’s independence,” said Michael Wan, a senior currency analyst at MUFG, adding that

combined with rising pressure on Indonesia’s fiscal deficit to rise above the current 3 percent cap, (it) has led to further FX pressure.

Meanwhile, Bank Indonesia is expected to leave its key rate unchanged at 4.75 percent again on Wednesday, according to a Reuters poll.

Stocks in Jakarta traded sideways in afternoon trade, hovering around record levels, while those in Thailand jumped 1.5 percent to its highest since early November.

The Malaysian ringgit traded flat ahead of the central bank’s monetary policy meeting on Thursday, where it is expected to keep its overnight policy rate unchanged at 2.75 percent. The Bank of Japan is expected to raise its growth estimates on Friday and signal interest rate hikes amid recent yen weakening and inflationary pressures.