Bank Indonesia (BI) and the central banks of the Philippines, Malaysia and Thailand signed on Friday a deal on a local currency settlement (LCS) framework in an effort to boost the use of local currencies for their respective bilateral trade transactions. The agreement between BI, Bank Negara Malaysia, Bangko Sentral ng Pilipinas and Bank of Thailand was inked on the sideline of a meeting among ASEAN finance ministers and central bank governors in Chiang Rai, Thailand. Three letter of intent (LoI) were signed by the participating central bank governors, including BI Governor Perry Warjiyo. “The agreement reflects a mutual interest among the four central banks and as part of the effort to establish an LCS framework in the four countries,” said BI spokesman Onny Widjanarko as quoted by tempo.co on Friday. He said the LCS framework was expected to facilitate more efficient economic and financial activities among the four countries and expand the use of existing LCS … [Read more...] about BI joins three other central banks to boost local currency transactions
Ringgit malaysia to thai baht
Asian currencies hurt by stronger dollar, ringgit top loser
BENGALURU: Asian currencies weakened across the board today following gains by the dollar on better-than-expected US data, with the ringgit the biggest loser after central bank comments seen as signalling a dovish tilt. Robust US economic data, on service industries and new home sales, saw the dollar index gain for a fifth straight session overnight and hover around two-week highs. The ringgit slid 0.3% to its weakest level in more than two weeks, after investors weighed commentary by Bank Negara Malaysia after its Tuesday policy meeting, where it kept interest rates unchanged as expected. The central bank outlined risks from unresolved trade tensions, heightened uncertainties on the global and domestic fronts and weakness in commodity-related sectors. The Philippine peso was little changed at 52.250, following a sharp fall on Tuesday after the announcement of February inflation falling back into the central bank’s target range sparked speculation of policy easing. Today, … [Read more...] about Asian currencies hurt by stronger dollar, ringgit top loser
News Bearish bets on Asian currencies dip slightly, peso seen most bearish: Reuters poll
Investors trimmed their bearish positions on emerging Asian currencies over the past two weeks, a Reuters poll showed, although escalating Sino-US tensions worsened the mid-term outlook for regional units. Risky asset classes such as regional equities and currencies were battered over the past few months amid a deepening dispute on trade the United States and China. US President Donald Trump's administration on Tuesday threatened China with 10 percent tariffs on $200 billion worth of Chinese imports, prompting a tumble in equity and foreign exchange markets. China has threatened to retaliate, but did not specify how. Recent dollar strength also weighed on Asian units. The currency stood at a six-month high against the yen, bolstered by expectations that the US Federal Reserve would hike interest rates two more times in 2018. In Asia, bearish bets on the Chinese yuan eased slightly, the Reuters poll of 13 respondents showed. But a majority of poll responses came … [Read more...] about News Bearish bets on Asian currencies dip slightly, peso seen most bearish: Reuters poll
Thai junta feeling heat from Malaysia poll
Barisan Nasional’s surprising defeat is a chilling warning for dominant one-party regimes, but the effects of this “people’s tsunami” is probably more keenly felt by our closest neighbour: Thailand. Thailand’s military-backed government is also feeling the heat. I spent the last five days in Bangkok and spoke to a number of Thai people to get an understanding of how much the restoration of a parliamentary democracy means to them. Incidentally, May 22 was the fourth anniversary of the Thai coup when the military seized power and declared martial law. “The generals are unlikely to relinquish power. They have been promising democratic elections but every time a small incident happens, they use it as an excuse to further delay polls,” said Werawat (last name withheld), a successful restaurateur. The businessman, who has interests in Malaysia, was extremely surprised by the turn of events on May 9. “Both Thailand and Malaysia have similar … [Read more...] about Thai junta feeling heat from Malaysia poll
Asian currencies, including ringgit, still considered cheap despite surge
Asian currencies are cheap in historical trade-weighted terms despite a steady rise to multi-year highs over the past year on broad US dollar weakness and strong flows into the region, analysts say.Malaysia’s ringgit, for instance, has appreciated more than 15 per cent against the dollar since the beginning of 2017, but in real effective exchange rate terms (REER), it is still 5 per cent below its 10-year average.REER is calculated on a trade-weighted basis against a basket of currencies and adjusted for inflation.The Japanese yen, Philippine peso and Indonesian rupiah are also trading below their 10-year averages.The rise in regional currencies against their trading partners’ currencies over the past year has been much lower than their gains on the dollar, keeping them attractive even now, analysts say.The South Korean won and the Thai baht have gained more than 12 per cent each against the dollar since Jan 2017, but their REER rates rose just about 4 per cent in that … [Read more...] about Asian currencies, including ringgit, still considered cheap despite surge