Asian currencies stronger; Philippines c.bank delivers expected rate hike
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Philippines c.bank delivers expected 25 basis point hike
Singapore February core inflation rises lower-than-forecast
Malaysian ringgit soars 0.9%
By Jaskiran Singh
March 23 (Reuters) -Asian currencies firmed on Thursday after the U.S. Federal Reserve softened its hawkish stance, with the Philippine peso inching higher after the country's central bank hiked interest rates in line with expectations.
The Bangko Sentral ng Pilipinas (BSP) hiked its benchmark rate by 25 basis points (bps) and revised down its forecasts for inflation this year.
With annual inflation slightly easing to 8.6% in February, the central bank now expects it to average 6.0% in 2023 and 2.9% in 2024, compared with 6.1% and 3.1% predicted previously.
The Philippine peso PHP= was marginally higher after weakening earlier in the session.
"Governor Medalla indicated that his next policy decision would be data-dependent while also sharing that outside developments, such as Fed moves, would be relevant but not necessarily key factors in decision-making, said Nicholas Mapa, senior economist at ING.
"Barring any fresh supply-side shocks, we believe that BSP will be open to shifting to a pause at their May meeting," Mapa added.
Additionally, the Singapore dollar SGD= rose 0.4%, on track for its sixth straight session of gains, while the local benchmark .STI fell 0.1%.
The city-state's key consumer price gauge rose 5.5% in February, unchanged from the previous month and lower than a forecast of 5.8%.
The Monetary Authority of Singapore (MAS) said that core inflation was likely to stay at about 5% for the early part of 2023. The central bank had tightened its monetary policy four times last year, including in two surprise moves.
"As growth slows and inflation pressures ease, we continue to forecast that MAS will keep policy settings on hold this year, although still elevated core inflation skews risks around MAS policy outcomes in a hawkish direction compared to our baseline projection," said analysts at Goldman Sachs.
Globally, the Fed adjusted to a more cautious stance on Wednesday, signalling it was on the verge of pausing interest rate rises, aiding riskier emerging Asian currencies.
The South Korean won KRW=KFTC led regional gains, appreciating more than 2%, while the Malaysian ringgit MYR=, and the Thai baht THB=TH strengthened 0.9% and 0.3%, respectively.
Markets in Indonesia were closed for a public holiday.
The Fed further reiterated its commitment to fight soaring inflation and delivered a widely expected 25 bps hike, dampening sentiment for regional equities.
Stocks in Malaysia .KLSE and Singapore .STI fell 0.5% and 0.1%, while shares in China .SSEC rose 0.6%.
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Asia stock indexes and currencies at 0717 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | +0.42 | +0.17 | .N225 | -0.17 | 5.08 |
China | CNY=CFXS | +0.56 | +1.18 | .SSEC | 0.64 | 6.39 |
India | INR=IN | +0.57 | +0.65 | .NSEI | 0.09 | -5.18 |
Indonesia | IDR= | +0.00 | +1.47 | .JKSE | 1.20 | -2.32 |
Malaysia | MYR= | +0.88 | -0.29 | .KLSE | -0.48 | -6.04 |
Philippines | PHP= | +0.09 | +2.43 | .PSI | -0.15 | -0.46 |
S.Korea | KRW=KFTC | +2.30 | -1.08 | .KS11 | 0.31 | 8.41 |
Singapore | SGD= | +0.40 | +1.09 | .STI | -0.11 | -1.04 |
Taiwan | TWD=TP | +0.55 | +1.15 | .TWII | 0.66 | 12.21 |
Thailand | THB=TH | +0.29 | +1.42 | .SETI | 0.42 | -4.61 |
Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
Asian stock marketshttps://tmsnrt.rs/2zpUAr4
Reporting by Jaskiran Singh in Bengaluru; Editing by Bradley Perrett and Sonia Cheema
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