EMERGING MARKETS – Indonesian rupiah climbs on palm oil export permits; Optimistic Asia FX

Band Harish Sridharan

June 3 (Reuters)The rupiah extended its gains on Friday as Indonesia’s decision to issue palm oil export permits after lifting a ban on shipments last week supported sentiment, while other Asian currencies rose against a weaker dollar ahead of a crucial US jobs report.

Indonesian rupiah RDI= strengthened 0.3% to its highest since late April, while South Korea gained KRW=KFTC was up 0.8%.

Most Asian currencies, which had struggled to post gains during the week, strengthened as market participants awaited key US jobs data later in the global trading day. for confirmation of a slowdown in the labor market, which could convince the Federal Reserve to scale back its hawkish stance. position on interest rates.

A senior Indonesian Ministry of Commerce official said on Thursday that the government had issued 160 export permits to 18 companies to ship palm oil. The country previously imposed a three-week export ban to control soaring domestic prices of palm oil-based cooking oil.

The yield on Indonesia’s 10-year benchmark note ID10YT=RR fell to its lowest level since late April and bonds across the yield curve strengthened, helped by low domestic inflation.

Indonesia’s inflation rate accelerated in May due to higher food and airfare prices, but remained within the central bank’s target range.

Nomura analysts expect Bank Indonesia to leave its key rate unchanged at its next policy meeting this month.

They cautioned, however, that by doing so, “BI could be seen as already behind the curve, which would threaten IDR stability amid widening current account deficits and a bullish cycle.” faster from the Fed, ultimately forcing BI to rise more aggressively.”

Jakarta Stocks .JKSE jumped nearly 1% to its highest level since late April, while shares in Mumbai .NSEI and Seoul .KS11 increased by 0.8% and 0.4% respectively.

South Korea released data showing its consumer price index rose 5.4% in May from a year ago due to a global spike in material and food costs, beating the 5.1% growth estimated in a Reuters poll and arguing for further rate hikes.

“The central bank’s likely intense focus on inflation should favor urgency over patience and suggests the rises will continue to be back-to-back,” Brian Tan, an economist at Barclays, said in a note.

He now expects the Bank of Korea to raise its key rate by 25 basis points in the remaining four meetings this year.

Markets in China, Hong Kong, Taiwan and Thailand were closed, reducing trading volumes in Asia.

STRONG POINTS

**Indian stocks hit their highest level in four weeks and are set for a third straight weekly gain .BO

** The Indonesian rupiah hits its highest level since April 27

** Yield on the Indonesian 1 year ID1YT=RR and 3-year notes ID3YT=RR hit lowest since April 13 and April 26, respectively

Asian stock indices and currencies at 06:46 GMT

COUNTRY

FXRIC

DAILY FX %

FX YTD%

INDEX

DAILY STOCKS %

INVENTORY YTD%

Japan

JPY=

-0.08

-11.43

.N225

1.27

-3.58

China

CNY=CFXS

+0.39

-4.58

.SSEC

0.42

-12.21

India

RNI=IN

-0.01

-4.23

.NSEI

0.77

-3.44

Indonesia

RDI=

+0.31

-1.28

.JKSE

0.99

9.70

Malaysia

MYR=

+0.09

-5.04

.KLSE

-0.38

-1.50

Philippines

PHP=

+0.00

-3.39

.PSI

0.48

-5.67

South Korea

KRW=KFTC

+0.76

-4.34

.KS11

0.44

-10.31

Singapore

CAD=

-0.09

-1.63

.STI

0.13

3.43

Taiwan

TWD=TP

-0.40

-5.78

.TWII

-0.73

-9:15 a.m.

Thailand

THB=TH

+0.00

-2.77

.SETI

-0.74

-0.60

Chart: World exchange rates https://tmsnrt.rs/2RBWI5E

Asian scholarshipshttps://tmsnrt.rs/2zpUAr4

(Reporting by Harish Sridharan in Bengaluru; Editing by Sherry Jacob-Phillips)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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