BENGALURU: Asian currencies slipped on Thursday, with the Indonesian rupiah and the Philippine peso unchanged after central bank policy decisions, while the South Korean shares surged to a fresh record high.
The policy decisions did little to stir markets, with both the central banks playing a straight bat: Bank Indonesia held rates steady and the Philippine central bank delivered a 25-basis-point cut, both in line with expectations. The Indonesian rupiah was down 0.1 percent ahead of the decision and held those losses after Bank Indonesia stood pat, while the Philippine peso stuck to a 0.2 percent fall.
“Bank Indonesia’s decision to hold rates signals a continued focus on rupiah stability, but with IDR still near recent lows, the currency is likely to remain sensitive to global risk sentiment,” said Glenn Yin, director of research at AC Capital Market.
The BSP’s cut reinforces its pro-growth stance, but the move could keep the peso under mild pressure in the near term as policy divergence and external volatility weigh on EM currencies, Yin said. Trading volumes improved on Thursday as most Asian markets reopened after the Lunar New Year holidays, though China and Taiwan markets stayed shut.
Overnight, investors assessed minutes from the Federal Open Market Committee, which indicated policymakers were in no rush to cut interest rates, with several members open to further hikes if inflation remains persistent.
“(The minutes) raised the prospect that rates may not be cut as much as previously thought… If this becomes a trend, that’s a big reason to be bullish on the US dollar and bearish on Asia FX,” said Kyle Rodda, senior financial analyst at Capital.com.