Commodity strength, economic recovery brightens Indonesian rupiah’s prospects – survey

By Sameer Manekar

Oct 21 (Reuters) – Investors became overwhelmingly bullish on the Indonesian rupiah as the country’s growth prospects improved in tandem with surging commodity prices, while sentiment on the Chinese yuan became positive again, a Reuters survey showed on Thursday.

Sentiments on the Singapore dollar SGD= turned positive, while bearish views on South Korea’s won KRW=KFTC, the Philippine peso PHP and Malaysian ringgit MYR= eased, a survey of nine analysts and fund managers showed.

The rupiah IDR=, which is among the best performing currencies in the region with only a marginal drop so far this year, was supported by a hefty trade deficit on the back of soaring coal prices and improving economic conditions. nL1N2RB05R nL1N2RF0FR

Indonesia, Southeast Asia’s biggest economy and the world’s biggest thermal coal exporter, is benefiting from a global energy crunch that is pushing coal prices to record highs due to a rise in consumption amid supply disruptions. nL1N2R905S nL1N2RB05R

The Reuters survey was conducted before coal plunged on China’s vow that it was looking at ways to rein in prices. The rupiah dropped on Thursday on the same concerns, but analysts still remain upbeat on its long-term prospects.nL1N2RG0ZQ EMRG/FRX

Investor sentiment towards the Chinese yuan CNY=CFXS improved drastically following its rise to a six-month high this week, as markets bet the authorities would contain the fallout from debt-laden developer China Evergrande Group 3333.HK.

The rise in yuan comes despite the manufacturing powerhouse facing a sharp slowdown in factory activity, with power shortages and a property market crisis weighing on economic growth.

In Southeast Asia, reopening of economies and easing of social curbs boosted activity, as the Philippines, Malaysia, Thailand and Indonesia all lifted restrictions on travel and social gatherings. nL1N2R701U nL1N2R603O nL1N2R7103 nL4N2QX08M

That prompted foreign investors to cash in on the growth prospects in the region, and became net buyers of Asian bonds for a sixteenth straight month in September. nL4N2RE1W8

Meanwhile, bearish views on the Indian rupee INR=IN increased, prompted by surging oil prices as India is the world’s third-biggest oil consumer. The rupee has lost nearly 1% this month so far.

(Reporting by Sameer Manekar in Bengaluru; editing by Uttaresh.V)

((Sameer.Manekar@thomsonreuters.com; +918061823447;))

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Asian currencies   AFX=   Asian currencies in Asia AFX=A 
Malaysian ringgit  MYRX=  Indonesian rupiah  IDRX= 
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Taiwan dollar      TWDX=  Hong Kong dollar   HKDX= 
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