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EMERGING MARKETS-Indonesian rupiah weakens on slow GDP growth
Nov 5 (Reuters) – Indonesia’s rupiah slumped on Friday after data showed the country’s third quarter economic growth missed expectations, as most Asian currencies eyed weekly losses following the U.S. Federal Reserve’s unveiling of its stimulus tapering plan.
The rupiah weakened 0.4% to lead losses after Southeast Asia’s largest economy’s quarterly GDP growth slowed to 3.51% due to pandemic related restrictions, even as recent data suggested growth may be getting back on track in the current quarter.
The rupiah was set for its worst weekly performance since August, 2020.
“There are several factors that will constrain the pace of recovery in domestic demand (in Indonesia),” ANZ Research analysts wrote in a note.
“While consumer sentiment has started to improve, expectations on income and employment remains well below pre-pandemic levels,” they added, saying a pick up in COVID-19 vaccinations could restore public confidence.
Meanwhile, Philippine stocks rose 1.9% to their highest since January after the country’s annual inflation slowed to a three-month low in October, reaffirming expectations the central bank would keep rates on hold for a while.
“We expect Bangko Sentral ng Pilipinas to maintain its current policy setting for the balance of 2021 and we retain our expectation for a possible rate adjustment from monetary authorities in second quarter of 2022,” analysts at ING wrote.
South Korean shares fell 0.5% and were set to log their third weekly decline, failing to catch a broader global rally, as growing inflationary threats dented risk appetite.
The won eased 0.2%.
The Taiwan dollar and Malaysian ringgit weakened 0.2% each against a strong dollar which was on course for a second straight week of gains.
A key U.S. jobs report is due later in the day that could sway the timing of Federal Reserve interest rate increases in the wake of its move to scale back its massive pandemic-era support on Wednesday.
HIGHLIGHTS
** In the Philippines, top index gainers are Robinsons Land Corp up 6.5% and Bloomberry Resorts Corp up 6.1%
** Indonesian 10-year benchmark yields are down 1.7 basis points at 6.207%
** Singapore’s 10-year benchmark yield is down 5.1 basis points at 1.8%
Source: Reuters