Friday, 30 September 2011

Yuan, rupiah, peso most resilient

The advantage of big populations
Manila Bulletin

MANILA, Philippines — The Chinese yuan, Indonesian rupiah and Philippine peso are likely to prove the most resilient of Asia’s emerging-market currencies as large domestic economies help China, Indonesia, and the Philippines withstand a global slowdown, Western Asset Management Co. said.

“They are more domestic-demand driven,” the fund manager, part of Baltimore-based Legg Mason Inc., said in a press release that didn’t identify the authors. Policy makers in China and Indonesia favor appreciation to help contain inflation, while the Philippine peso will be supported by remittances from overseas workers, the statement said.

The Philippine peso strengthened 0.7 percent to 43.54 per dollar today in Manila, according to Tullett Prebon Plc.

Remittances sent home by Philippine citizens living abroad amounted to $1.7 billion in July, boosting this year’s tally to $11.35 billion, the central bank said on Sept. 15. The funds account for about 10 percent of the Philippines’ $200 billion economy and help fuel consumer spending.

The yuan has strengthened 1.1 percent against the dollar this quarter, making it the sole gainer among Asia’s 10 most-used currencies excluding the yen. The rupiah fell 4.2 percent and the peso slid 0.5 percent, according to data compiled by Bloomberg. South Korea’s won is the region’s worst performer, having tumbled 9.2 percent.

Indonesia is the world’s most-populous Muslim nation and has Southeast Asia’s biggest economy. President Susilo Bambang Yudhoyono said last month that economic growth may reach 6.5 percent this year, the fastest since the 1998 Asian financial crisis, even with recent shocks to the global economy. Domestic demand accounts for about 56 percent of gross domestic product.

The rupiah gained 0.4 percent to 8,870 per dollar today in Jakarta, following a 1.7 percent advance yesterday, according to prices from local banks compiled by Bloomberg. It fell 3.1 percent on Sept. 26 and retreated in each of the last three weeks. Bank Indonesia said as recently as last week it’s been selling dollars this month to support the rupiah.

The nation’s inflation rate rose to 4.79 percent in August from 4.61 percent the previous month, official figures show. Data next week are expected to show consumer-price gains accelerated to 4.9 percent this month, based on the median estimate in a Bloomberg survey of economists.

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