BENGALURU: Malaysia’s ringgit hovered around 26-year lows on Wednesday while other emerging Asian currencies strengthened marginally and Indonesia’s central bank kept its policy rates unchanged as expected.

The ringgit edged up 0.1%, recovering marginally but still near its lowest levels since January 1998, which it hit on Tuesday.

Taking stock of the slide, Malaysia’s central bank reassured markets by saying that the unit’s recent performance was largely due to external factors and did not reflect the health of the country’s economy.

“Some of these (external) factors include market adjustment to changing US interest rate expectations, geopolitical concerns and uncertainty surrounding China’s economic prospects,” said Bank Negara Malaysia chief Abdul Rasheed Ghaffour in a statement.

Bank Indonesia (BI) kept its policy rates unchanged as expected in a Reuters poll and said that current levels were consistent with efforts to keep the Indonesian rupiah stable and ensure inflation remained within target.

“On IDR, near-term risks are on the balance of payment side, as Indonesia (will) turn (to) full-year current account deficit again this year,” said Fakhrul Fulvian, economist at Trimegah Securities.

“We expect BI to only able to cut rates post the Fed rate cut, which is in 3Q24,” he added.

The rupiah appreciated as much as 0.2%, while local stocks were down 0.7%.

Stocks in the region eased as diminishing expectations of early interest rate cuts from the Federal Reserve sapped risk appetite.

The Fed will release minutes of its last meeting later in the day, though they have been overtaken by high readings for consumer and producer prices.