Malaysian ringgit hits more than 3-year high on China stimulus, leads Asian FX rally
Malaysian ringgit up 0.7%
Taiwan stocks up 1.3%
Indonesian rupiah strengthens 0.6%
By Echha Jain and Aaditya GovindRao
Sept 25 (Reuters) -Asian currencies rallied on Wednesday, with the Malaysia ringgit hitting a more than three-year high asChina's central bank cut its medium-term loan rate a day after Beijing'sbroad policy easing measures to boost a weak economy.
Regional shares also rose, with theMSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS jumpingas much as 1.4% to its highest level since late February 2022, while the broad MSCI emerging markets currency index .MIEM00000CUS added as much as 0.3% to a record high.
The ringgit MYR=, the best-performing currency so far this year, appreciated as much as 0.7% against the U.S. dollar to 4.12 per dollar, its highest sinceJune 11, 2021.
Shanghai stocks .SSEC gained 1.7%, while the yuan CNY=CFXS edged 0.2% higher. The People's Bank of China followed its wide-ranging policy easing announcement on Tuesday with a cut in medium-term lending rates to banks on Wednesday.
Beijing's broad-based stimulus - the biggest since the pandemic - also included steps to boost China's stock market and support the ailing property sector.
"We see the measures as positive, indicating that policymakers are increasingly concerned about weakness in the economy and markets," analysts at Morgan Stanley said.
Ringgit's lead was closely followed by the Indonesian rupiah IDR= and Philippine peso PHP=, which were up 0.6% each.
Bank Indonesia will cut interest rates twice more this year after last week's surprise reduction, a Reuters poll of economists predicted, as a stronger rupiah and subdued inflation allow the central bank to focus on supporting growth.
Meanwhile, Philippine Finance Secretary Ralph Recto, who has a seat on the central bank's monetary board, said on Tuesday the monetary authority can afford to slash interest rates further to even match the Fed'srate cut size.
"A combination of further gains in the yuan, growth in the region looking fine, Fed easing cycle and softer dollar should continue to benefit Asian currencies," said Christopher Wong, currency strategist at OCBC.
Bangkok stocks .SETI edged 0.1% higher while the baht THB=TH was flat. The country's government will discuss the strong baht and the inflation target range with the Bank of Thailand next week, as the government pushes for a rate reduction.
The Taiwan dollar TWD=TP strengthened 0.4%, while local stocks .TWII jumped 1.3% to their highest since mid-July.
Equities in Indonesia .JKSE and Philippines .PSI dropped 1.2% and 0.7%, respectively.
HIGHLIGHTS:
** Vietnam, U.S. firms sign MoUs on energy, AI, data centre, Vietnam govt. says
** Thailand kicks off first phase of $14 bln "digital wallet" stimulus scheme
** Meituan raises $2.5 bln in dollar bonds in China's first tech debt deal of 2024
Asian stock indexes and currencies as of 0351 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | -0.10 | -1.60 | .N225 | 0.20 | 13.60 |
China | CNY=CFXS | +0.21 | +1.15 | .SSEC | 1.73 | -2.09 |
India | INR=IN | +0.14 | -0.41 | .NSEI | 0.00 | 19.37 |
Indonesia | IDR= | +0.60 | +2.02 | .JKSE | -1.24 | 5.63 |
Malaysia | MYR= | +0.73 | +11.41 | .KLSE | 0.04 | 14.88 |
Philippines | PHP= | +0.55 | -0.93 | .PSI | -0.74 | 14.37 |
S.Korea | KRW=KFTC | +0.13 | -3.06 | .KS11 | -0.04 | -0.93 |
Singapore | SGD= | +0.05 | +2.83 | .STI | -0.67 | 11.06 |
Taiwan | TWD=TP | +0.40 | -3.46 | .TWII | 1.32 | 26.75 |
Thailand | THB=TH | +0.02 | +4.62 | .SETI | 0.14 | 3.41 |
Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by Echha Jain and Aaditya Govind Rao in Bengaluru; Editing by Sumana Nandy
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