May 14, 2014 / 5:43 AM / 4 years ago

EM ASIA FX-Rupiah leads gains on boost to Jokowi's election campaign

* Foreign, local banks add rupiah holdings
    * Jakarta shares hit 11-month high
    * Ringgit rises on foreign banks, strong bond sale
    * Philippine peso at 6-month high on offshore funds
    * Won weaker as "strong" intervention spotted -traders

 (Adds text, updates prices)
    By Jongwoo Cheon
    SINGAPORE, May 14 (Reuters) - The Indonesian rupiah led
gains among emerging Asian currencies on Wednesday after the
presidential candidacy of Jakarta Governor Joko "Jokowi" Widodo
gained support from a major political party.
    On Tuesday, frontrunner Jokowi secured the support of
Golkar, the political vehicle of longtime president Suharto, for
the presidential vote on July 19. Golkar won 15 percent of the
parliamentary vote in April, while Jokowi's party got 19
percent. 
    The rupiah rose 0.6 percent to 11,465. If that
holds up for the day, Wednesday will see the currency's largest
daily percentage gain since March 28, according to Thomson
Reuters data.
    Foreign and local banks bought the Indonesian currency as
its non-deliverable forwards (NDFs) also rose. Local
stocks hit an 11-month high.
    The proposed alliance is expected not only to increase
chances of Jokowi's victory but also to mean Indonesia's new
president will be decided in July rather than wait for a second
round of voting in September, analysts and traders said.
    "If the campaign for the presidency can finish with just one
round, it will be good for the rupiah," said a Jakarta-based
currency trader, adding the rupiah may strengthen to 11,000
eventually.
    "There would be more time to get the government up and
running to get address necessary issues like fuel subsidies,"
the trader said.
    Jokowi has said he wants to slowly reduce fuel subsidies
over the subsidies over the next few years. Economists said that
is the best option to ease pressure on Indonesia's budget while
keeping inflation in check. 
    In April, investors took profits from the rupiah as his
Indonesia Democratic Party-Struggle (PDI-P) came first but
failed to win enough seats to nominate a president by itself,
forcing it to join with other parties.
    The rupiah has been the best performing Asian currency with
a 6.1 percent gain against the dollar this year.
    Foreign investors have bought a combined net 35 trillion
rupiah ($3 billion) in Jakarta shares so far this year, exchange
data showed. In 2013, they dumped some 21 trillion rupiah worth
of stocks.
    Through May 9, Foreigners had increased their holdings of
Indonesian government bonds holding by 55.6 trillion rupiah this
year, according to the government data.
       
    RINGGIT
    The Malaysian ringgit rose on demand from foreign
banks and a strong government bond sale.
    Malaysian government has sold 2.0 billion ringgit ($617.6
million) in government bonds maturing in 2033 at an average
yield of 4.639 percent with the bid-to-cover ratio of 2.88
times, the central bank said. 
    "It is better to stay short dollar. If it breaks 3.22, it
will test below 3.2," said a senior Malaysian bank trader in
Kuala Lumpur, referring to the dollar/ringgit rate.
    Still, the trader said he is unlikely to add fresh long
positions in the ringgit around the current level of 3.2230 as
it is not from this year's high of 3.2155.
    The ringgit found further support from demand against the
Singapore dollar. The Malaysian currency rose as much
as 0.4 percent to 2.5743 to the city-state's unit, its strongest
since March 20.
    
    PHILIPPINE PESO
    The peso advanced as much as 0.6 percent to 43.57 against
the U.S. dollar, its strongest since Nov. 20, on demand from
offshore funds.
    The currency's NDFs advanced, while five- and 10- year
government bond yields  fell.
    The central bank has not been spotted intervening to stem
the currency's strengthening, but investors remained cautious,
traders said, as the authority said it is ready to guard against
excessive fund inflows. 
    A senior Philippine bank trader in Manila said the peso may
strengthen to 43.50, but he would wait for weaker levels to add
more bullish bets on the peso.
    
    WON
    The South Korean won fell as the foreign exchange
authorities were spotted intervening, traders said.
    In the local market, the won started slightly weaker, but
turned firmer on demand from exporters and as foreign investors
bought Seoul shares.
    The currency, however, reversed the direction to hit 1,030.0
per dollar, its weakest since May 2.
    "Strong intervention boosted caution over the authorities,"
said a South Korean bank trader in Seoul.

    CURRENCIES VS U.S. DOLLAR
    Change on the day at 0535 GMT 
 Currency    Latest bid   Previous day    Pct Move
  Japan yen       102.13         102.26       +0.13
  Sing dlr        1.2490         1.2520       +0.24
  Taiwan dlr      30.182         30.212       +0.10
  Korean won     1026.30        1022.10       -0.41
  Baht             32.45          32.61       +0.49
  Peso             43.61          43.82       +0.47
  Rupiah        11465.00       11535.00       +0.61
  Rupee            59.68          59.66       -0.03
  Ringgit         3.2230         3.2385       +0.48
  Yuan            6.2275         6.2291       +0.03
 
  Change so far in 2014
  Currency    Latest bid  End prev year    Pct Move
  Japan yen       102.13         105.28       +3.08
  Sing dlr        1.2490         1.2632       +1.14
  Taiwan dlr      30.182         29.950       -0.77
  Korean won     1026.30        1055.40       +2.84
  Baht             32.45          32.86       +1.26
  Peso             43.61          44.40       +1.80
  Rupiah        11465.00       12160.00       +6.06
  Rupee            59.68          61.80       +3.55
  Ringgit         3.2230         3.2755       +1.63
  Yuan            6.2275         6.0539       -2.79
 ($1 = 11536.5 rupiah)
($1 = 3.2385 ringgit)

 (Additional reporting by Yena Park in SEOUL; Editing by Richard
Borsuk)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below