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Indonesian rupiah hits lowest since April 2020

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Philippine c.bank decision due next week

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Philippine stocks hit six-month low

By Rajasik Mukherjee

June 21 (Reuters) - Asian currencies were subdued

against the U.S. dollar on Friday, with the Indonesian rupiah

touching a fresh four-year low, as the Federal Reserve's patient

stance towards interest rates adds pressure as yield

differentials widen.

The Indonesian rupiah slipped 0.3% to 16,475.00, the

lowest since early April 2020, a day after Bank Indonesia (BI)

kept its interest rate unchanged but said it will fine-tune

other tools to stabilise the weakening currency.

The rupiah has lost more than 6% so far this year, and is

among the worst performing currencies in the region.

"Looking ahead, BI will intervene actively in the FX market,

optimise monetary instruments, and maintain strong yields to

attract capital inflows," Karinska Priyatno, a fixed income

analyst at Mirae Asset Securities wrote.

"With corporate USD demand peaking in the second quarter and

subsiding in third quarter, rupiah pressure is expected to ease

in the near future."

Meanwhile, most other Asian currencies have declined sharply

so far this year. The Philippine peso, Thai baht, and

Taiwan dollar have each lost more than 5%, while the

Malaysian ringgit and Singapore dollar are down

over 2%.

"Widening yield differentials between U.S. and Asia is one

of the major drivers for Asian FX volatility and weakness. If

this persists, we may continue to see further weakness for most

Asian FX," Christopher Wong, an FX strategist at OCBC, said.

In the Philippines, the peso appreciated slightly on Friday

while equities declined 1.6% - the lowest since

mid-December - ahead of the central bank's monetary policy

meeting next week.

"Dovish BSP (Bangko Sentral ng Pilipinas) guidance and

divergence with U.S. and some of the monetary policies in the

region makes PHP more vulnerable among Asian currencies

excluding Japan," Wong said.

"For the next meeting, our house view still looks for BSP to

stay on hold."

Elsewhere in the region, the South Korean won was

down 0.3% while equities in Seoul lost 0.8%, breaking a

three-day rally.

South Korea's foreign exchange authorities said they agreed

with the National Pension Service to expand a currency swap line

to $50 billion from the current $35 billion to defend the

tumbling won against the dollar.

The won has fallen more than 7% against the dollar so far

this year.

Shares in Taipei lost 0.6% for the day, but were on

track for their best week since early March. The Taiwan dollar

was largely unchanged.

HIGHLIGHTS:

** Indonesian 10-year benchmark yields rise to 7.152%

** Thai PM says he expects to announce more stimulus

measures early next week

** Japan's demand-led inflation slows, clouds BOJ rate hike

path

Asia stock indexes and

currencies at 0407 GMT

COUNTRY FX RIC FX FX INDE STOCK STOCK

DAILY YTD % X S S YTD

% DAILY %

%

Japan +0.01 -11.2 %

China EC>

India +0.08 -0.45 Indones -0.12 -6.38 Malaysi -0.11 -2.61 Philipp +0.12 -5.82 S.Korea 11>

Singapo +0.09 -2.51 Taiwan -0.04 -4.97 Thailan +0.08 -6.91