July 16, 2020 / 8:11 AM / 19 days ago

EMERGING MARKETS-Rupiah hit by fourth rate cut, FinMin exit sinks baht

    * Graphic: World FX rates tmsnrt.rs/2egbfVh
    * Graphic: Foreign flows into Asian stocks tmsnrt.rs/3f2vwbA
    * Thai baht hits over 1-month low
    * Bank Indonesia cuts rates by 25 bps to 4.00%

    By Shriya Ramakrishnan
    July 16 (Reuters) - The Indonesian rupiah retreated on
Thursday after central bank officials cut interest rates by
another quarter point, while the Thai baht sank following the
surprise departure of its finance minister in an Asian morning
marked by a dramatic dive in Chinese shares. 
    Bank Indonesia (BI) cut its benchmark interest rate to
4.00%, the lowest since at least 2016 and in line with a slim
majority of analysts in a Reuters poll, as it strives to do more
to prop up an economy sliding towards recession.
    The move follows the launch of a $40 billion financing
scheme earlier this month which also includes central bank bond
buying.
    "(The bank) has shifted towards growth support ... cutting
rates over two consecutive meetings," said Wei Liang Chang, a
macro strategist at DBS Bank. 
    "Lower rates may induce outflow pressures on the rupiah,
especially if liquidity is to expand with BI’s government debt
purchases."
    In military-controlled Thailand, the baht weakened
as much as 0.8% to 31.74 per dollar and the benchmark stock
index dropped 0.5%, after finance chief Uttama
Savanayana and two other ministers resigned.
    The shake-up comes as the government rolls out billions of
dollars of stimulus measures to support an ailing economy
through the coronavirus pandemic at a time when investors are
also eyeing its choice for the next governor of the Bank of
Thailand.
    Thai Prime Minister Prayuth Chan-ocha said the cabinet
reshuffle would take place by next month, having earlier said it
would happen in September.
    "Political noise does not bode well for consumer and
business sentiment," said Tim Leelahaphan, economist at Standard
Chartered Bank. 
    "While the government has sufficient borrowing room to
support the economy, political stability is crucial – especially
with the fiscal package being rolled out." 
    Chinese stocks were the worst performers, plunging
about 4.5% as concerns about deteriorating U.S.-China relations
took some of the shine off better-than-expected economic growth
data.
    Philippine stocks, however, gained as investors
picked up blue-chip stocks after losses this month which have
outstripped other Asian markets. The Manila benchmark index
closed about 2.2% higher after steep declines a day earlier.  
    
    HIGHLIGHTS:
    
    ** Indonesian 3-year benchmark yields are down 2.9 basis
points at 5.867%
    ** In the Philippines, top index gainers are Bloomberry
Resorts Corp up 12.48% at 7.48 peso, First Gen Corp
 up 6.28% at 23.7 peso, Megaworld Corp up ​
5.33% at 3.16 peso
    ** Top losers on the Singapore STI include CapitaLand
Commercial Trust down 2.79% at S$1.74; Genting
Singapore Ltd down 2.55% at S$0.765; UOL Group Ltd
 down 1.73% at S$6.83
    
    
  Asia stock indexes and                                      
 currencies at   0758 GMT                                
 COUNTRY   FX RIC          FX   FX YTD    INDEX  STOCKS  STOCK
                      DAILY %        %            DAILY  S YTD
                                                      %      %
 Japan                  -0.03    +1.55            -0.76  -3.75
 China     <CNY=CFXS    -0.13    -0.49            -4.50   5.24
           >                                             
 India                  -0.06    -5.07             0.31  -12.4
                                                             7
 Indonesi               +0.10    -4.67             0.39  -19.1
 a                                                           1
 Malaysia               -0.19    -4.19            -0.76  -0.96
 Philippi               -0.20    +2.26             2.18  -21.3
 nes                                                         4
 S.Korea   <KRW=KFTC    -0.42    -4.08            -0.82  -0.63
           >                                             
 Singapor               -0.24    -3.43            -0.88  -18.5
 e                                                           3
 Taiwan                 +0.02    +1.80            -0.37   1.34
 Thailand               -0.51    -5.50            -0.48  -14.6
                                                             9
 
 (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by
Patrick Graham)
  
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