Philippine peso hits record low, Indonesian rupiah steadies after support steps

• Philippine peso hits 60.776 per dollar
• South Korean stocks fall over 5%
• Indonesian rupiah weakens to 16,993 per dollar

The Philippine peso hit a record low on Monday and the Indonesian rupiah stopped short of touching a historic trough of 17,000 per dollar as the country’s central bank introduced a new tool for banks to manage foreign-currency liquidity.

The Philippine peso <PHP=> hit a low of 60.776 per dollar, while stocks in Manila <.PSI> tumbled 2.5%, as the net oil importer grapples with an “imminent danger of a critically low energy supply.” A number of oil-importing countries in the region have been hit hard by the U.S.-Israeli war on Iran, which has effectively closed off the Strait of Hormuz, a key transit point for Middle Eastern oil.

Indonesia, another oil-importing country, continues to experience massive outflows due to concerns about the impact of elevated oil prices, compounding persistent concerns over fiscal and governance risks.

Jakarta stocks <.JKSE> fell more than 2%, extending monthly losses to around 14% and putting them on course for their worst month since March 2020.

Foreign investors have pulled out 21.37 trillion rupiah ($1.26 billion) from Indonesia’s stock markets so far this month, the largest outflow in at least over a decade, according to LSEG data.

Its currency, the rupiah <IDR=>, wallowed at around 16,900 a dollar, a stone’s throw from its record low of 17,000.

Bank Indonesia on Monday implemented new foreign exchange repo transactions using its FX-denominated securities, providing banks with an alternative for liquidity management, particularly foreign exchange liquidity.

“The instruments function as high-quality, short-term collateral: Banks obtain the dollars they need, repay the loan when cash returns, while the collateral stays on the balance sheet,” said Wei Li, head of multi-asset investments at BNP Paribas.

“The repo’s market-neutral design limits immediate pressure on the IDR/USD rate, unlike a direct spot sale that would inject rupiah liquidity.”

Elsewhere in emerging markets, the Indian rupee<INR=IN> rallied sharply to 93.85 per dollar after the central bank tightened limits on banks’ foreign exchange positions.

Malaysia’s benchmark stock index <.KLSE> dipped 1.5%, while stocks in South Korea <.KS11> and Taiwan <.TWII> fell as much as 5.3% and 2.4%.

The conflict in the Middle East and its impact on global energy prices and supply continues to roil financial markets worldwide. Oil-importing Asian emerging economies are particularly exposed, with higher prices already triggering capital outflows and pressuring currencies.

Foreign investors have pulled 34.71 billion baht ($1.06 billion) out of Thai equities <.SETI>, while stock markets in South Korea and Taiwan have seen outflows worth $19.71 billion and $25.74 billion, respectively, exchange and LSEG data showed.

HIGHLIGHTS:

** Taiwan’s opposition leader to visit China next month, ahead of Trump

** India bonds set to rise as borrowing plan offers much-needed relief

** Bank of Japan chief signals vigilance to yen moves, impact on economy

($1 = 16,988.0000 rupiah)

($1 = 32.8100 baht)

($1 = 31.9940 Taiwan dollars)

($1 = 1,512.6100 won)

—Reporting by Shivangi Lahiri in Bengaluru; Editing by Thomas Derpinghaus