(April 29): Thai stocks extended gains on Wednesday after the central bank kept the key interest rate unchanged as expected, while the Indonesian rupiah and the Philippine peso traded at record lows as dwindling hopes of a Middle East peace deal raised uncertainty over the net oil importing nations’ outlook.
The Philippine peso slid 0.9% to an all-time low of 61.06 per US dollar. The currency, which has fallen for eight straight sessions, is only ahead of the Indian rupee — Asia’s worst performing currency so far this year.
The Indonesian rupiah traded at 17,320 per US dollar, not far from an all-time low of 17,335 per dollar hit earlier in the session.
Higher energy prices due to the Iran conflict have clouded the growth outlook for net oil importing nations. For Indonesia, elevated fuel costs add to the growing list of concerns among foreign investors, including worries about the country’s fiscal and governance health.
“The longer the standoff between the US and Iran, the tighter the oil market, and oil prices will have to be re-priced higher,” said Christopher Wong, a currency strategist with OCBC.
“Ultimately, this can weigh on Asia excluding-Japan momentum, especially for oil-sensitive currencies, including the peso, rupiah, and baht.”
Stocks in Thailand added minor gains after briefly pulling back as the central bank held rates, as expected, at 1.00%, the lowest level in more than three years. It had cut the rate at its previous meeting in February.
“It seems like the Bank of Thailand will likely be in wait-and-see mode as staying on hold could mean the BOT has more flexibility to adjust its monetary policy amidst the highly uncertain nature of the Middle East situation,” said Poon Panichpibool, markets strategist at Krungthai Bank.
Panichpibool expects the Middle East crisis to ease within the second quarter, prompting the gradual recovery of transportation through the Strait of Hormuz. The BOT could stay on hold through 2026 and 2027, he added.
The Thai baht, meanwhile, weakened to 32.62 per dollar, and has lost 3.6% so far this year.
Stocks in the region traded mixed. Taiwan equities were last down 0.6%, cutting losses from earlier in the session, while South Korean stocks continued their ascent, gaining 0.7% to trade near all-time high.
Singapore stocks fell 0.5% and were set for the sixth straight session of losses, while equities in Manila climbed 0.7%, breaking a five-session losing streak.
Uploaded by Magessan Varatharaja
