BENGALURU: The Indonesian rupiah strengthened and shares in Jakarta held ground after the central bank hiked rates a second time in two weeks on Thursday, aiming to draw fresh inflows and stem pressure on the currency and broader local assets.
Bank Indonesia (BI) raised key interest rates to 5.75 percent, as expected, just a week after an off-cycle increase as policymakers continue their efforts to support the rupiah.
The rupiah is down about 6 percent this year, having pared some losses since last week’s surprise rate hike. Regardless, it remains one of the worst performing units in emerging Asia.
In the Philippines, the peso rose briefly to 60.40 before giving up gains and trading at 60.580 per US dollar.
Most emerging Asian equities rose, led by a 2.3 percent jump in South Korea’s benchmark to its first close above 9,000. This, along with record highs in Taiwan and Singapore, helped lift MSCI’s EM Asia index to a two-week peak.
Currencies, however, were pressured by a strong dollar, which hit a two-month high overnight, after the Fed held its benchmark rate but half of the policymakers projected a rate hike this year.
The Malaysian ringgit fell as much as 0.9 percent to 4.102 per dollar.
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