*
Asian currencies and stocks broadly fall
*
Singapore shares hit lowest level in nearly one month
*
Thai baht dips to lowest level since Jan 6
By Tejaswi Marthi
Feb 15 (Reuters) - The Malaysian ringgit and the
Philippines peso fell to more than one-month lows on Wednesday
as the dollar advanced after stubbornly high U.S. inflation data
intensified fears of interest rates being higher for longer.
The ringgit and the peso fell 0.7% each to hit
their lowest level since Jan. 9 and Jan. 13, respectively. The
Thai baht also traded 0.4% down to hit an over
one-month low.
Headline Consumer Price Index (CPI) was 0.5% in January
mostly due to higher rental and food costs. That was in line
with forecasts, though the annual figure of 6.4% was a bit more
than expected and traders busily unwound bets on rates falling
toward the end of 2023. Federal Reserve officials said on Tuesday the U.S. central
bank will need to keep gradually raising interest rates to beat
inflation.
"The CPI release is a hiccup to the dis-inflationary theme that has been playing out. The upshot is that it is too early to declare that the inflation battle has been won," DBS analysts said in a client note.
"From a policy perspective, we are not convinced that the terminal rate pricing should be materially higher than the 5.25% guided in December. We maintain that the bulk of tightening is behind us. It makes more sense to hold rates for longer to gauge the lagged impact of monetary policy unto the real economy," they added. Equities in the region were also in a sea of red, with Taiwanese shares dropping 1.5% to lead losses, while stocks in Indonesia dropped 0.7%. Malaysian shares and Philippines shares also fell.
Singapore's finance minister Lawrence Wong said on Tuesday
he expected a slight deficit of 0.1% of GDP for the 2023 budget,
which was aimed at helping households manage pressures of rising
living costs and reviving the city-state's pandemic depleted
coffers.
Singapore's trade-reliant economy faces headwinds this year
from slowing global growth, inflation and rising interest rates.
Meanwhile, its expenditures are increasing due to the climbing
cost of healthcare, driven by an ageing population.
The Singapore dollar fell 0.3% and equities in Singapore fell 1.1% to hit their lowest level in one month.
"Elevated inflation coupled with slowing growth mean that the Monetary Authority of Singapore (MAS) will have to strike a balance between remaining hawkish but at the same time mindful of Singapore’s export competitiveness," ING analysts wrote.
HIGHLIGHTS:
** Indonesian 10-year benchmark yields rise marginally to
6.738%
** China's central bank ramped up medium-term liquidity
injections as it rolled over maturing policy loans on Wednesday,
while it kept the interest rate unchanged, matching market
expectations.
** Onions put Philippines in a stew over food price
inflation Asia stock indexes and currencies at 0349 GMT
COUNTRY FX RIC FX FX INDEX STOCKS STOCKS
DAILY % YTD % DAILY YTD %
%
Japan +0.07 -1.44 <.N22 -0.48 5.30
5>
China -0.18 +0.83 <.SSE -0.32 6.26
C>
India -0.14 -0.18 <.NSE 0.00 -0.97
I>
Indonesi -0.23 +2.47 <.JKS -0.71 0.62
a E>
Malaysia -0.73 +0.48 <.KLS -0.23 -1.00
E>
Philippi -0.73 +0.94 <.PSI -0.45 2.95
nes >
S.Korea -0.79 -1.17 <.KS1 -1.29 8.83
1>
Singapor -0.32 +0.58 <.STI -1.01 1.02
e >
Taiwan -0.34 +1.29 <.TWI -1.47 9.11
I>
Thailand -0.53 +1.53 <.SET 0.13 -0.83
I>
(Reporting by Tejaswi Marthi in Bengaluru; Editing by
Muralikumar Anantharaman)
