Asian currencies: Rupiah, ringgit gains as dollar wobbles

BENGALURU: The Indonesian rupiah was the top gainer among a bunch of tepid Southeast Asian currencies on Friday after the country’s president laid down plans for a new wealth fund, while the Malaysian ringgit held firm after local growth data.

Asian forex markets were boosted as the US dollar wobbled after US President Donald Trump’s reciprocal tariffs were not immediately imposed, suggesting room for negotiations.

In Indonesia, President Prabowo Subianto said a new sovereign wealth fund would start operations this month with an estimated $900 billion in assets under management, aimed at boosting annual growth to meet an 8% target.

The local currency gained 0.5% against the dollar, while equities in Jakarta were trading about 0.1% higher.

“Markets appear buoyed by potential delays in tariffs, which are pushing trade-open economies’ FX like the ringgit, while an additional factor for the rupiah rising is President Prabowo’s plan for a sovereign wealth fund,” said Jeff Ng, head of Asia macro strategy at Sumitomo Mitsui Banking Corporation.

In Malaysia, the ringgit rose 0.3% after data showed the economy grew faster than expected in the fourth quarter. Stocks in Kuala Lumpur, however, dropped 0.2%. The Singapore dollar held ground at a 0.1% dip after data showed the island nation, too, finished 2024 on a stronger-than-anticipated note, placing the government in a more favourable position to manage global uncertainties and address concerns about the cost of living in an election year.

The country is also to announce its budget next week, where the government is expected to tackle living costs and jobs.