EMERGING MARKETS-Thai baht unchanged after c.bank hikes rates; Singapore stock rally

By Savyata Mishra

Jan 25 (Reuters)The Thai baht was broadly unchanged on Wednesday after the country’s central bank hiked interest rates as expected and hinted at further adjustments, while Singapore shares hovered near a nine-month high after inflation data.

The baht THB=TH – Asia’s best-performing currency so far this year – edged 0.1% lower with the Bank of Thailand (BoT) say any further rate hikes would be gradual and measured, but it stood ready to adjust.

“Expanded policy space from THB rebound does leave the door open for a pause predicated on elevated debt vulnerabilities,” said Vishnu Varathan, an analyst at Mizuho Bank.

Foreign visitors to the country surged in 2022 from a year ago, with the country’s vital tourism sector set for a further boost from a recently approved $120 million budget.

China’s abrupt dismantling of its strict COVID measures has driven a recovery in risk appetite in Asia in recent weeks, with Thailand, Singapore and Malaysia emerging as the top beneficiaries.

Malaysia’s ringgit MYR= rose 0.4%, the South Korean won KRW=KFTC firm 0.3% and the Indian rupee INR=IN was up marginally by 0.1%.

Singapore dollars SGD= rose 0.4% with data showing December core inflation came in slightly higher than the forecast.

“Our view for the Monetary Authority of Singapore (MAS) to further tighten monetary policy in April 2023 remains unchanged,” said Barnabas Gan, senior economist at RHB Singapore.

The dollar index =USD weakened in Asia after data showed US business activity shrank for a seventh straight month. Markets expect a 25 bps rate hike from the Federal Reserve in February.

Most regional markets resumed trading after a holiday-extended weekend, though China, Taiwan and Hong Kong remained shut.

The Pakistani rupee PKR= fell by 1.2% against the US dollar after foreign exchange companies removed an upper cap on the currency, saying it was creating “artificial” distortions in the market.

Meanwhile, Sri Lanka’s central bank held interest rates steady in a widely expected move, saying the prevailing tight monetary stance is crucial to taming still-high inflation and restoring economic stability.

Indonesia rupiah IDR= slipped 0.5%, reversing a sharp 1.2% jump on Tuesday. The country’s central bank last week signaled an early end to its tightening cycle.

Asian equities rose even as the extended market closure in China capped volumes. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS advanced 0.2%, holding below a seven-month peak.

Singapore’s Straits Times index .STI was 1.5% higher after earlier hitting its highest since May 5 and Seoul shares .KS11 climbed 1.4%.

Philippines stock .PSI rose 0.6% after a delayed opening on Wednesday due to a technical issue, while the Thai stocks .SETI were steady at 0.2%.

Indian shares .NSEI fell 1.2%, Jakarta stocks .JKSE were down 0.5% and Malaysian shares .CLSE declined 0.2%.

HIGHLIGHTS:

** Thailand’s central bank raised its key interest rate by 25 basis points on Wednesday, as it attempts to curb high inflation even as the return of Chinese tourists brightens the country’s economic growth prospects

** Indonesia’s foreign direct investment surged 44.2% on a yearly basis in 2022, the investment minister said on Tuesday, listing 2023 would be a more difficult year to attract investment

** Thailand’s exports contracted more than expected in December and only modest growth was expected for 2023 with a strong baht currency hurting trade competitiveness, the commerce ministry said

Asia stock indexes and currencies at 0725 GMT

COUNTRY

FX RIC

FX DAILY %

FX YTD %

INDEX

STOCKS DAILY %

STOCK YTD %

Japan

JPY=

-0.16

+0.58

.N225

0.35

4.98

China

CNY=CFXS

-0.32

+1.54

.SSEC

0.76

5.68

India

INR=IN

+0.08

+1.31

.NSEI

-1.24

-1.17

Indonesia

IDR=

-0.50

+4.04

.JKSE

-0.47

-0.32

Malaysia

MYR=

+0.45

+3.19

.CLSE

-0.19

0.13

Philippines

PHP=

+0.04

+2.05

.PSI

0.57

7.84

S.Korea

KRW=KFTC

+0.31

+2.66

.KS11

1.39

8.59

Singapore

SGD=

+0.33

+1.88

.STI

1.69

3.02

Taiwan

TWD=TP

-0.12

+1.12

.TWII

0.04

5.62

Thailand

THB=TH

-0.14

+5.46

.SETI

0.20

1.06

Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

Asian stock marketshttps://tmsnrt.rs/2zpUAr4

(Reporting by Savyata Mishra in Bengaluru; Editing by Eileen Soreng)

((Savyata.Mishra@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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