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EMERGING MARKETS-Indonesia's surprise rate hike lifts rupiah and stocks
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EMERGING MARKETS-Indonesia's surprise rate hike lifts rupiah and stocks
Jun 9, 2026 2:47 AM

* China's export growth accelerates in May

* Hungary's inflation fell in May

* South Africa's first-quarter GDP due later in the day

By Avinash P

June 9 (Reuters) - The Indonesian rupiah strengthened after

the nation's central bank surprised markets with a rate hike to

try to support the falling currency, while equities recorded

their biggest one-day gain in over six years.

The Bank Indonesia raised its borrowing rates by 25 basis points

on Tuesday in an unexpected off-cycle rate hike to aid the

rupiah, which has depreciated by almost 8% so far this

year, making it one of the worst performing currencies among

emerging markets.

The rupiah strengthened to 18,075 after the decision,

bouncing off a record low in the previous session. Jakarta's

stocks rose 6.7% for their best day since March 2020.

ANALYST SAYS MORE REQUIRED THAN A RATE HIKE

"Bank Indonesia's decision to lift its policy rate in an

emergency meeting today reflects growing concerns about the

weakness of the rupiah," said Jason Tuvey, deputy chief emerging

markets economist at Capital Economics.

Beyond the interest rate increase, he said for the currency

to strengthen the Prabowo administration needed to shift away

from its populist and interventionist policy agenda.

"There's still no sign that this is forthcoming," he added.

MSCI's global EM stock index jumped 3.3%, after

logging in its biggest intra-day drop in three-months on Monday.

The recovery was led by an 8.8% advance in South Korea's

KOSPI as investors bought into the dip in AI shares.

A halt in strikes between Iran and Israel also buoyed broader

risk sentiment.

Data from China showed that the country's export growth

accelerated in May, supported by robust demand for chips, autos

and other high-tech goods fuelling the global AI boom.

China's benchmark indexes gained 1.3% and

1.9%, respectively. The yuan added 0.2% versus the

U.S. dollar.

The broader EM currency gauge was up 0.3%,

with a weaker U.S. dollar lending support.

South Africa's stocks gained 0.7%, while the rand

rose 0.4% ahead of the GDP data later in the day.

Economists polled by Reuters estimate a GDP growth of 0.3%

quarter-on-quarter and 1.8% year-on-year.

Turkey's benchmark rose 0.2% and the lira

was flat.

Fitch cut its outlook on the global sovereigns sector to

"deteriorating" from "neutral" due to the impacts stemming from

the Iran war.

In emerging Europe, currencies firmed against the euro, with

Hungary's forint up 0.1%, taking its yearly gain to

7.5%. The currency is also one of the best performers against

the dollar among its emerging market cohorts with a nearly 6%

rise so far this year.

Hungary's headline inflation rate fell to an annual 1.8% in May,

sharply below forecasts, which some analysts said allowed for

the central bank to lower interest rates later this month.

Hungary's equities gained 0.8%. Polish and

Romanian stocks advanced 0.8% and 0.2%, respectively.

HIGHLIGHTS:

** India's RBI offers concessional swaps, allows leverage for

NRI deposits to drive forex inflows

** South Korea Q1 GDP grows 1.8% q/q, stronger than advance

estimate

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see

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