JAKARTA (Reuters): Indonesia's rupiah and stocks were steady after August inflation came within the central bank's target range and matched market expectations, while other emerging Asian currencies lost ground as investors braced for a data-packed week.
The rupiah was down 0.5% and equities in Jakarta were up 0.4%, largely unchanged from levels seen before the data release.
The country's annual inflation rate last month was essentially unchanged from July. Inflation in South-East Asia's biggest economy has held within the central bank's target range since the middle of last year, but Bank Indonesia (BI) has kept interest rates relatively high to focus on anchoring the rupiah and weathering global market volatility.
"While we note the risk of an earlier September start, we expect BI to commence policy rate cuts in November," Barclays wrote.
A string of inflation data is due this week, including in the Philippines, Taiwan, Thailand and South Korea, which could provide clarity on interest rate paths.
Malaysia's central bank, which has held rates steady since May 2023 after delivering a cumulative 125 basis points in hikes over the previous year, will meet on Thursday.
"The risk to inflation continues to be on the upside, in our view, and hence we think the central bank will keep the policy rate unchanged for the rest of this year," Goldman Sachs said in a note.
The Chinese yuan slipped 0.2%, while Shanghai stocks fell 0.8%. Data released on Saturday showed that the country's manufacturing activity sank to a six-month low in August as factory gate prices tumbled and owners struggled for orders.
Globally, traders will focus on a slew of key U.S. data before the Federal Reserve's September meeting, including the employment report and non-farm payrolls data for August on Friday.
In Asia, Thailand's baht depreciated 0.5%, while stocks fell 0.4%. The Malaysian ringgit slipped 0.3%, while Kuala Lumpur stocks retreated 0.1%.
The Indian rupee was flat, while equities edged 0.3% higher. Data on Friday showed that the country's economic growth slowed to 6.7% year-on-year in the April-June quarter as a decline in government spending during national elections weighed.
"A transient slowdown due to sluggish public spending during Q2 2024 aside, the GDP fine print points to a balanced and sustainable growth path ahead," ANZ wrote in a note.
The Philippine peso slipped 0.3%, while Manila stocks advanced 0.5%. The country's inflation was likely to be within a 3.2% to 4.0% range in August, compared with an annual inflation rate of 4.4% in July, the central bank said on Friday. - Reuters
