July 3, 2020 / 4:20 AM / a month ago

EMERGING MARKETS-Rupiah tumbles on debt monetization concerns, spike in virus cases

    * Graphic: World FX rates tmsnrt.rs/2egbfVh
    * Graphic: Foreign flows into Asian stocks tmsnrt.rs/3f2vwbA
    * Indonesian rupiah hits lowest since May 29 
    * BI plans purchase of low-yield bonds
    * Focus next week: Malaysia's c.bank policy meet on Tuesday

    By Rashmi Ashok
    July 3 (Reuters) - The Indonesian rupiah fell nearly 2% on
Friday and was set for its biggest weekly drop since March as
worries about its central bank buying low-yielding government
bonds persisted, while broader Asian stocks were boosted by
robust U.S. jobs data.
    The rupiah is heading for a loss of more than 2.6%
this week, its biggest weekly fall since the near 8% plunge it
recorded in mid-March during a severe dollar funding shortage in
Asian markets. 
    Investors became concerned after Bank Indonesia (BI) on
Monday agreed to 'share the burden' with the government and buy
bonds with even zero yields to help finance a fiscal deficit
bloated by spending to tackle the coronavirus.
    "We expect concerns over the planned burden-sharing
arrangement to hurt market sentiment in the near term with
rupiah likely facing marginal depreciation with Bank Indonesia
capping any sharp weakening trend," analysts at ING said in a
note.  
    BI Deputy Governor Dody Budi Waluyo said on Friday the
pressure on the rupiah during the week was due to domestic
factors such as fear of a second wave of COVID-19 infections,
adding that recent indicators showed the economy could avoid a 
recession despite weak growth in the second quarter.

    Indonesia reported a record jump in daily new coronavirus
infections on Thursday, and its capital Jakarta delayed a full
exit from a partial lockdown due to the spike in cases. 
    The Thai baht eased slightly and was poised for a
four-day losing streak. Inflation data for June is expected
later in the session and seen slightly less negative owing to
relaxation of movement restrictions. 
    Most Asian shares rose, led by Chinese stocks, and
buoyed by an upbeat session on Wall Street on the back of data
that showed the U.S. economy created jobs at a record pace in
June as more restaurants and bars reopened.
    Among data releases in the coming week, the highlight will
be Malaysia's central bank meeting on July 7. Some analysts
expect Bank Negara Malaysia will cut rates again, after cutting
them in May to 2%, the lowest since 2009. 
    
    
    HIGHLIGHTS:
    ** Singapore's 10-year benchmark yield fell 1.1 basis points
to 0.881%​​ while the 5-year benchmark yield eased by the same
margin to 0.504%​​ 
    ** Top gainers on the Singapore STI include Thai
Beverage PCL up 2.22% and CapitaLand Commercial Trust
 up 1.71%
    ** Top gainers on FTSE Bursa Malaysia Kl Index
include Sime Darby Bhd up 2.39% and Press Metal
Aluminium Holdings Bhd up 2.38% 

  Asia stock indexes and                                    
 currencies at   0341 GMT                            
 COUNTRY  FX RIC        FX   FX YTD    INDEX  STOCK   STOCKS
                     DAILY        %               S    YTD %
                         %                    DAILY  
                                                  %  
 Japan               -0.02    +1.03            0.34    -6.07
 China    <CNY=CFX   +0.01    -1.45            0.95     2.29
          S>                                         
 India               +0.00    -4.84            0.00   -13.29
 Indones             -1.75    -4.67            0.43   -20.82
 ia                                                  
 Malaysi             -0.02    -4.55            0.41    -2.91
 a                                                   
 Philipp             +0.30    +2.22           -0.27   -18.79
 ines                                                
 S.Korea  <KRW=KFT   -0.08    -3.71            0.56    -2.30
          C>                                         
 Singapo             -0.01    -3.60            0.53   -17.76
 re                                                  
 Taiwan              +0.48    +2.24            0.82    -0.80
 Thailan             -0.10    -3.89           -0.01   -13.03
 d                                                   
 






 (Reporting by Rashmi Ashok in Bengaluru; Editing by Simon
Cameron-Moore)
  
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