April 13 (Bloomberg) -- Indonesia’s rupiah gained the most among Asian currencies to reach the highest level in more than two months as President Susilo Bambang Yudhoyono’s party took the lead in elections and strengthened his grip on power.
The Philippine peso rose before a report this week that may show money sent home by workers abroad increased in February, while a BusinessMirror report said there are more than 221,000 jobs available for Filipinos in the Middle East this year. Taiwan’s dollar advanced as overseas investors increased their holdings of the island’s shares, signaling risk appetite for Asian assets may be improving.
“The firmer tone in the stock markets has supported Asian currencies,” said Jerry Yoshikoshi, a senior economist with Sumitomo Mitsui Banking Corp. in Singapore.
The rupiah rose 1.5 percent to 11,143 per U.S. dollar as of 10:52 a.m. in Jakarta, according to data compiled by Bloomberg. The peso climbed 0.4 percent to 47.840 in Manila, according to Tullett Prebon Plc. The Taiwanese dollar gained 0.2 percent to NT$33.7270.
The MSCI Asia Pacific Index of regional stocks rose 0.5 percent to 88.42, the highest level since Jan. 13, as Japan more than doubled its stimulus spending and Chinese lending jumped by a record. The index has rallied 25 percent since dropping to a more than five-year low on March 9 based on closing prices.
The People’s Bank of China said yesterday that the country will ensure there’s sufficient liquidity after new loans surged. Japan’s Prime Minister Taro Aso last week announced his third spending plan, which will total 56.8 trillion yen ($566 billion).
Filipino Remittances
The peso gained following a two-day holiday before the remittances report on April 15. Money sent home by Filipinos accounts for a 10th of the Philippines $144 billion economy and are the nation’s second-largest source of foreign exchange after exports.
“If remittance growth continues to be up or at least flat, that is positive for the peso,” said Rafael Algarra, treasurer at Security Banking Corp. in Manila.
Extra spending by Asian governments to stimulate their economies and revive exports is helping boost investor sentiment in emerging markets.
Taiwan’s currency has risen 4.5 percent since touching a six-year low on March 3 as the benchmark Taiex index of stocks rallied 31 percent. Foreign investors bought $804 million more Taiwanese shares than they sold this month, according to data from the stock exchange.
Taiwan Inflows
“The Taiwan dollar is stronger this morning due to the stock market which has gained quite a bit,” said Henry Lin, a foreign-exchange trader at Shin Kong Commercial Bank in Taipei. “Investors are also taking their cues from U.S. stocks.”
Thailand’s baht fell to its weakest level this month in offshore trading on concern violent anti-government protests will deter investment and force Prime Minister Abhisit Vejjajiva to step down.
The currency extended its loss this year to 2.5 percent as protesters calling for Abhisit’s resignation defied a state of emergency to stage rallies in Bangkok, prompting the government to send in troops to restore order. Continued unrest may worsen an economy facing its first annual contraction in 11 years.
Thailand’s credit rating may be lowered as the violence escalates, Standard & Poor’s said today. The ratings agency said it has a negative outlook, which “implies there is a significant chance of a ratings downgrade,” Kim Eng Tan, a director of sovereign ratings, said in an interview in Singapore.
‘Pivotal Moment’
“It is a pivotal moment, really,” said Jerry Yoshikoshi, senior economist with Sumitomo Mitsui Banking Corp. in Singapore. “Even if Abhisit resigns, I don’t think it will change the political climate in the longer term. We have been bearish on the country in the long-term. The baht will be an underperformer in coming months.”
The baht fell 0.6 percent to 35.61 in Singapore, according to data compiled by Bloomberg. Financial markets in Thailand are closed until April 16 for the Thai New Year holiday.
Korea’s currency retreated after touching 1,300 per dollar on April 10, the strongest in three months, as overseas investors repatriated dividends. Global funds’ purchases of Korean shares will help soak up dividend-linked demand for dollars, said Roh Sang Chil, a currency dealer with Kookmin Bank in Seoul, the nation’s biggest lender.
“There are steady outflows from dividends paid to foreign stock holders,” said Roh. “Still, sentiment in the market isn’t as depressed as before with the markets restoring stability. It may rebound later depending on the size of foreign net purchases of stocks.”
The won fell 0.2 percent to 1,335.82 per dollar, according to data compiled by Bloomberg. The currency is down 5.7 percent this year, Asia’s worst performer.
Elsewhere, Malaysia’s ringgit was little changed at 3.6180 per dollar, compared with 3.6165 on April 10. China’s yuan traded at 6.8325 versus 6.8336 at the end of last week. Singapore’s dollar rose 0.2 percent to S$1.5156 from S$1.5182.
To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net.
