Rupiah off 7-week high on poll uncertainty, ringgit weaker

  • Business
  • Thursday, 10 Jul 2014

SEOUL: The Indonesian rupiah hit a seven-week high on Thursday, in tandem with firmer local stocks and bond prices, but pared gains on uncertainty over who won closely fought presidential elections.

Both Jakarta Governor Joko "Jokowi" Widodo and ex-general Prabowo Subianto on Wednesday declared themselves the election winner based on contradictory quick count results. That suggests a winner will unlikely be known until official results are announced in two weeks.

Among other regional currencies, the Malaysian ringgit turned weaker as investors cut bullish positions, despite widespread expectations that the central bank will raise interest rates for the first time in more than three years later in the day.

Traders and analysts said an expected 25 basis point increase in the rate to 3.25% had already been priced in.

Most emerging Asian currencies also turned weaker after data showed China's trade performance in June did not improve as much as expected.

The South Korean won ended lower for a fifth consecutive session. The Bank of Korea held interest rates steady and modestly scaled back its expectations for growth and inflation, a sign that rates will stay steady for some time.

Local importers bought dollars for settlements with some suspecting the foreign exchange authorities intervening to stem further appreciation in the second-best performing emerging Asian currency so far this year.

Earlier in the day, regional units advanced after minutes of the US Federal Reserve's June meeting provided no clear time frame of when interest rates will rise.

The Thai baht hit a three-month high on demand from offshore hedge funds and rises in Bangkok stocks and government bond prices. – Reuters 

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