BENGALURU (July 16): The Thai baht fell to a one-month low today after the surprise resignation of the country's finance minister, while the Indonesian rupiah weakened as investors braced for a fourth interest rate cut this year.
Leading declines among Asian currencies, the baht fell as much as 0.6% to 31.69 against the greenback, while Thai stocks were flat following their best session in two weeks yesterday.
The departure of Thailand's Finance Minister Uttama Savanayana comes as the government rolls out billions of dollars of stimulus to drive a post-pandemic recovery in Southeast Asia's worst performing economy.
Christopher Wong, a senior foreign exchange strategist at Maybank in Singapore, said Uttama's departure "raises concerns if the implementation of fiscal stimuli support would be affected in the near term".
In Indonesia, the rupiah shed as much as 0.2%, while the stock index gained about half a per cent ahead of a central bank meeting.
A slim majority of analysts polled by Reuters expected Bank Indonesia (BI) to cut its benchmark rate by 25 basis points to 4%, the lowest since at least 2016, as it tackles a slowdown in growth and inflation in Southeast Asia's largest economy.
The rupiah is down about 5% against the US dollar so far this year, shedding 3% in the past three weeks alone.
"While there has been a relative uptick in rupiah volatility of late, on balance, it is probably not enough for them to pause at this stage," analysts at OCBC Bank said in a note.
The South Korean won and equities dipped as the Bank of Korea kept its key policy rate on hold but governor Lee Ju-yeol outlined a bleak outlook for the trade-reliant economy due to weaker exports.
Philippine stocks outperformed equity markets across Asia as investors bought into beaten-down blue-chip stocks following steep declines in the Manila benchmark index in the previous session.