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Business Recorder
23-07-2025
- Business
- Business Recorder
Asia currencies: S Korean won and Thai baht edges lower
BENGALURU: Emerging Asian equities trended lower on Tuesday as investors took stock of regional governments' trade talks with the US, with Thai shares falling due to worries over the independence of the domestic central bank following a key appointment. Thailand's benchmark index fell over 1% after news that Vitai Ratanakorn, a perceived rate-cut advocate, would take the helm at the Bank of Thailand. The Thai baht slipped further, down 0.3% on the day. 'Given the weakness of Thailand's economy, there is no doubt that the country needs lower interest rates,' said Gareth Leather, senior Asia economist at Capital Economics, but added the appointment may fuel concerns about the bank's independence. Thai equities have risen over 8% since reports of Ratanakorn's appointment, anticipating monetary easing, but have also raised concerns about ongoing tensions between the BoT and the government regarding pressure for rate cuts. 'While we have some sympathy with the government's argument that interest rates have been kept too high for too long, over the longer term, there is strong evidence that central bank independence tends o deliver better inflation outcomes,' added Leather. Across the region, most stock markets were in the red, with Taiwan, South Korea and Malaysia posting losses between 0.3% and 1.5%. Taiwan equities extended their decline into a second session, giving back some of the 5% gain accumulated earlier this month. Meanwhile, Jakarta's benchmark continued to outperform, rising for a 12th straight session, underpinned by optimism following a recent US trade agreement and domestic policy easing.
The Star
22-07-2025
- Business
- The Star
Asia markets slip on renewed tariff tensions; Bangkok appoints new cenbank chief
Emerging Asian equities trended lower on Tuesday as investors took stock of regional governments' trade talks with the U.S., with Thai shares falling due to worries over the independence of the domestic central bank following a key appointment. Thailand's benchmark index fell over 1% after news that Vitai Ratanakorn, a perceived rate-cut advocate, would take the helm at the Bank of Thailand. The Thai baht slipped further, down 0.3% on the day. "Given the weakness of Thailand's economy, there is no doubt that the country needs lower interest rates," said Gareth Leather, senior Asia economist at Capital Economics, but added the appointment may fuel concerns about the bank's independence. Thai equities have risen over 8% since reports of Ratanakorn's appointment, anticipating monetary easing, but have also raised concerns about ongoing tensions between the BoT and the government regarding pressure for rate cuts. "While we have some sympathy with the government's argument that interest rates have been kept too high for too long, over the longer term, there is strong evidence that central bank independence tends to deliver better inflation outcomes," added Leather. Across the region, most stock markets were in the red, with Taiwan, South Korea and Malaysia posting losses between 0.3% and 1.5%. Taiwan equities extended their decline into a second session, giving back some of the 5% gain accumulated earlier this month. Meanwhile, Jakarta's benchmark continued to outperform, rising for a 12th straight session, underpinned by optimism following a recent U.S. trade agreement and domestic policy easing. Singapore's Straits Times Index also retreated from record highs after 14 sessions of fresh peaks. Investors are now focused on the Monetary Authority of Singapore's policy meeting on July 30. In the currency markets, regional units moved in tight ranges as the August 1 deadline loomed for Southeast Asian nations to strike trade deals with the U.S. or face sweeping tariffs. The South Korean won and Thai baht edged lower, while the Malaysian ringgit posted modest gains. The MSCI index of emerging market currencies held steady but remains down roughly 1% from its July 3 record high. "We are in a backdrop of a fragile global environment where events ranging from Japanese upper house elections to U.S. President Donald Trump's tariff threats continue to create much uncertainty and cloud the outlook for markets," said Maybank analysts. Japan's Nikkei closed lower, while the yen softened slightly after weekend election results delivered a setback to the ruling coalition, though the outcome was broadly in line with investor expectations. HIGHLIGHTS ** Indonesian 10-year benchmark yield flat at 6.519% ** Philippines' Marcos to meet Trump hoping to secure trade deal ** Thailand foreign tourist arrivals fall 5.91% annually so far in 2025 - Reuters
Reuters
06-03-2025
- Business
- Reuters
Malaysia central bank holds key rate steady, flags cloudy global outlook
Summary Central bank holds overnight policy rate at 3% Analysts expect no change to rate in 2025 Tariff uncertainties cloud global outlook, central bank says Inflation likely to pick up, analyst says KUALA LUMPUR, March 6 (Reuters) - Malaysia's central bank kept its benchmark interest rate (MYINTR=ECI), opens new tab unchanged on Thursday, expecting economic activity to remain strong this year and inflation manageable, but it warned of increasing risks to the global economy. Bank Negara Malaysia (BNM) maintained its overnight policy rate at 3.00%, the same level since May 2023, and in line with market expectations that the central bank will hold rates steady through this year. "Despite external uncertainties, the strength in economic activity is expected to be sustained in 2025, anchored by domestic demand," the central bank said in a statement. Regional peers, such as Bank Indonesia, the Bank of Thailand, and the Philippine central bank, have cut rates to support sluggish growth. Malaysia's government and central bank have forecast the economy to expand between 4.5% and 5.5% in 2025, following 5.1% growth in 2024. "However, the outlook for global growth, inflation and trade is subject to considerable uncertainties surrounding tariffs and other policies from major economies and geopolitical developments," the central bank said. BNM expects Malaysia's inflation rate to remain manageable in 2025 amid easing global prices and the absence of excessive domestic demand pressures. Headline and core inflation stood at 1.7% and 1.8% respectively in January, it said. The inflationary impact from recently introduced wage policies is expected to be limited, but further domestic policy changes, global commodity prices, financial markets, and trade policies could be potential risks, BNM said. Analysts at Capital Economics do not expect any changes to Malaysia's monetary policy this year, but cautioned that inflation was likely to increase following planned cuts in some fuel subsidies, expected in the middle of the year. "The changes will likely push the headline rate above 3% next year," Gareth Leather said in a note. "Although BNM does not have an explicit target, inflation over 3% year-on-year would be outside what we consider to be the central bank's comfort zone." While financial markets could face increased volatility, the central bank said a favourable domestic outlook and structural reforms would help support Malaysia's ringgit currency .
