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EMERGING MARKETS-Rupiah steadies as Bank Indonesia holds fire, stocks recover on China data

Published 10/13/2020, 04:40 PM
Updated 10/13/2020, 04:50 PM
© Reuters.

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh
* Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3lKhL5I
* Singapore, Malaysian shares reverse course
* Indonesia c.bank keeps interest rates steady at 4.00%
* Thailand markets shut for a holiday

By Shriya Ramakrishnan
Oct 13 (Reuters) - The Indonesian rupiah held steady on
Tuesday after the central bank, as expected, kept interest rates
unchanged to support the currency's stability, while upbeat
Chinese trade figures helped stocks and currencies across the
region stage a late recovery.
Bank Indonesia (BI) kept the benchmark interest rate at
4.00%, as it tries to avoid putting more pressure on a falling
rupiah IDR= , but reiterated its pledge to use quantitative
easing to support the coronavirus-hit economy. Stocks in Jakarta .JKSE were up 0.8%.
"Clearly a deteriorating weak economy does not appear to
pose as much a challenge to the central bank as a potentially
weak currency and the concomitant impact on bond flows," said
Kunal Kundu, India economist with Societe Generale.
"... It appears to be a chicken and egg situation. Unless
the confidence on the economy goes up adequately, bond flows may
not improve but unless the bond flows improve adequately to
support the currency, BI may continue to maintain status quo."
The rupiah, Asia's worst-hit currency this year, has been
under pressure on concerns over proposed changes to the central
bank act that could undermine BI's independence.
Singapore stocks .STI reversed course to gain as much as
0.7%, while South Korean shares .KS11 also trimmed losses to
close marginally lower.
Sentiment improved after Chinese customs data showed that
imports grew at their fastest pace this year in September, while
exports extended strong gains in a further boost to the world's
second-biggest economy. In Malaysia, where markets were largely on the edge awaiting
developments on opposition leader Anwar Ibrahim's meeting with
the king, the ringgit MYR= edged down and stocks .KLSE
reversed course to trade 0.5% higher.
Anwar said he submitted documents proving his parliamentary
support to form a new government and that Prime Minister
Muhyiddin Yassin should resign. He also said he had the support
of over 120 lawmakers in the 222-strong parliament. Malaysia's palace, however, said Anwar did not disclose to
the king the identities of lawmakers who he said are supporting
his bid to form a new government. "We will have to wait a while longer to find out if Anwar
Ibrahim really has enough numbers to topple the government,"
said Khoon Goh, head of Asia research at ANZ.
"Markets do not seem to be reacting much to the latest
development...this may suggest that markets are not placing a
high probability to a change in government."
Financial markets in Thailand were closed for a holiday.

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HIGHLIGHTS:
** Indonesian 10-year benchmark yields ID10YT=RR are down
1.2 basis points at 6.888%
** Top gainers on FTSE Bursa Malaysia Kl Index .KLSE
include Petronas Dagangan Bhd PETR.KL , up 2.67% at 20.02
ringgit, followed by Hap Seng Consolidated Bhd HAPS.KL that
rose 2.18% to 7.49 ringgit
** Top gainers on the Jakarta stock index .JKSE include
Bank Victoria International Tbk PT BVIC.JK , up 31.94% at 95
rupiah, followed by Bank BRISyariah Tbk PT BRIS.JK that jumped
25% to 1125 rupiah


Asia stock indexes and
currencies at 0805 GMT
COUNTRY FX RIC FX FX INDEX STOCK STOCKS
DAILY YTD % S YTD %
% DAILY
%
Japan JPY= -0.15 +2.99 .N225 0.18 -0.23
China CNY=CFXS -0.03 +3.19 .SSEC 0.04 10.15
India INR=IN -0.12 -2.70 .NSEI 0.03 -1.93
Indonesi IDR= +0.00 -5.45 .JKSE 0.78 -18.52
a
Malaysia MYR= -0.07 -1.35 .KLSE 0.45 -4.00
Philippi PHP= +0.00 +4.26 .PSI -0.23 -24.21
nes
S.Korea KRW=KFTC -0.03 +0.81 .KS11 -0.02 9.35
Singapor SGD= -0.13 -1.06 .STI 0.28 -20.58
e
Taiwan TWD=TP -0.04 +4.10 .TWII -0.07 7.92

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