Rupiah reels as virus cases surge, politics bites baht

Indonesia's rupiah fell to a two-month low and Jakarta stocks skidded on Monday, after the country's number of coronavirus cases overtook China for the first time, while the resignation of a fifth cabinet member in five days hit the Thai baht.

The rupiah lost as much as 0.9pc against the dollar, while shares gave up 0.8pc, as infections in Indonesia reached almost 85,000 and authorities in Southeast Asia's largest economy warned the number could be even higher than reported.

Bank Indonesia, which last week cut official interest rates for the fourth time this year, on Monday forecast an economic contraction of between 4.0pc to 4.8pc year-on-year for the second quarter and predicted a "U-shaped" recovery from the pandemic.

The central bank later stepped in to try and calm nerves following Monday's decline, saying it had intervened on the currency and would step up efforts to defend the rupiah if the exchange rate weakened sharply.

In Bangkok, the baht fell 0.4pc to its lowest since June 1, and stocks gave up earlier gains to trade 0.2pc lower, after the Minister to the Prime Minister's Office Tewan Liptapanlop quit.

The latest departure comes amid mounting uncertainty following the sudden exit of Finance Minister Uttama Savanayana last week, calls for the government to resign and a delay in picking a new central bank chief.

"We are in the middle of finding a new economic team ... there is uncertainty around the outlook for the fiscal policy to support the Thai economy and also to restart the economy back to normal," said Peerapan Suwannarat, senior market and economic research specialist at Kasikornbank.

"The turning point should be the naming of the new (finance) minister."

Prime Minister Prayuth Chan-ocha said on Friday he had asked top banking executive Predee Daochai, widely tipped to take over at finance, to join his cabinet.

Outgoing central bank Governor Veerathai Santiprabhob ruled himself out of joining the new economic team on Saturday.

Elsewhere, Philippine stocks recouped some recent losses to rise 1pc, while investors looked for cues from Europe and the United States on further fiscal stimulus to counteract the effects of the pandemic.