Asian currencies: Malaysian ringgit extends gains

BENGALURU: The Malaysian ringgit extended gains on Wednesday after the country’s central bank kept interest rate unchanged, in line with expectations, while a gauge of emerging Asian equities reversed course weighed by China on US tariff plans.

The ringgit was last up 0.7%, trading near a six-week peak.

Bank Negara Malaysia kept its benchmark interest rate steady, and said that going into 2025, inflation is expected to remain manageable, amid the easing global cost conditions and the absence of excessive domestic demand pressures.

Malaysian stocks were last up 0.5%.

An MSCI gauge of emerging Asian economies’ shares was trading flat after advancing as much as 0.6% earlier, as stocks in China and Hong Kong fell after US President Donald Trump said his administration was discussing a 10% punitive duty on Chinese imports.

China’s Shanghai Composite Index and the blue-chip CSEI 300 Index declined around 0.9% each, while Hong Kong’s benchmark Hang Seng Index slipped from a one-month high. China’s currency, yuan, was down 0.3%.

Other regional stock markets were broadly higher, with the technology-heavy Taiwanese and South Korean markets up more than 1%, tracking overnight Wall Street gains.

Indonesian stocks rallied for a sixth straight session, jumping more than 1%, led by mining and banking stocks. the rupiah rose 0.3%.

Indonesia’s chief economic minister said on Tuesday the country will require natural resource exports to hold all their proceeds onshore for at least one year - a move that could boost the country’s annual foreign exchange reserves by $90 billion.

While the new rule helps in providing more US dollar liquidity to the central bank, incremental benefits are limited since the central bank’s reserves are already deemed adequate and additional reserves may not necessarily change the extent of smoothing in the markets, analysts at Bank of America said in a note last week.

The rupiah has lost about 1.2% in value this year, becoming the worst performing currency in the region so far.

In Singapore, traders await the Monetary Authority of Singapore’s (MAS) first policy decision of 2025 later this week. Economists are split on whether the central bank will loosen policy or leave its settings unchanged to assess Trump’s policies. Singapore’s dollar fell 0.2%, while stocks were flat.