Indonesia’s Rupiah, stocks decline on surging inflation; Asian markets mixed- Republic World

Indonesian Rupiah | Image: X Photo

Asian markets mixed: Indonesia’s rupiah and stock market plunged to multi-month lows on Monday following the release of higher-than-anticipated inflation data.

While Indonesia grapples with economic concerns, optimism prevailed in other Asian markets, buoyed by robust manufacturing data from China, the world’s second-largest economy.

The Indonesian rupiah fell by as much as 0.4 per cent against the US dollar, hitting its lowest level since November 1. This prompted intervention by the Bank Indonesia (BI) to stabilise the currency.

Concurrently, Indonesia’s benchmark stock index dropped 1.8 per cent to its lowest point since January 30, driven by news of the sharpest rise in annual inflation in seven months.

With the Indonesian central bank maintaining a cautious stance on policy easing, other Asian currencies remained relatively subdued.

Meanwhile, positive sentiment from China’s manufacturing activity bolstered Asian stock markets, with shares in China jumping 1 per cent to reach their highest level since March 22.

Additionally, India’s NSE Nifty 50 index surged to a record high, while shares in Singapore, the Philippines, and Malaysia also saw gains ranging from 0.4 per cent to 1.1 per cent.

OCBC’s currency strategist, Christopher Wong, noted that China’s PMI data provided optimism for Asian currencies.

However, attention remains on the yuan’s performance, as well as moves in the Japanese yen and Chinese renminbi, which could influence Asian FX markets.

Market focus shifts to US March manufacturing PMI data and forthcoming inflation figures from South Korea and Thailand.

Traders are particularly interested in Thailand’s inflation data, as a softer-than-expected print may impact expectations of a Bank of Thailand rate cut, potentially influencing the Thai baht.

(With Reuters inputs.)