RUPIAH - SINGAPORE. Indonesia's rupiah led declines among emerging Asian currencies on Monday after the country overtook China with the most confirmed coronavirus cases in East Asia, while the resignation of a fifth cabinet member in five days hit the Thai baht.
The rupiah lost 0.8% against the dollar to hit a two-month low, while shares gave up half a percent, as traders worried that the actual infection rate could be even higher.
Bank Indonesia, which cut interest rates for the fourth time this year last week, on Monday forecast an economic contraction of between 4% to 4.8% year-on-year for the second quarter, predicting a "U-shaped" recovery from the pandemic.
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Southeast Asia's largest economy also increased tax incentives for businesses to cushion the blow from the virus, but analysts were sceptical of its impact.
"Tax relief for manufacturing workers and SMEs due to expire in September have been extended till end-year, but likely would not inspire much confidence about the economic recovery," analysts from Maybank wrote in a note.]
In Bangkok, the baht fell 0.4% to its lowest since June 1, as Prime Minister Prayuth Chan-ocha's office said Minister to the Prime Minister's Office Tewan Liptapanlop would quit.
That followed calls over the weekend for the government to resign and an ongoing delay in picking a new central bank chief, which have added to the sudden resignation of Finance Minister Uttama Savanayana last week.
Bangkok's benchmark stocks index, however, climbed for the second straight session, adding 0.3%.
"The news of a fifth cabinet minister resigning had weighed on sentiment... While the index retains moderate gains into the afternoon, we are looking at a number of defensive sectors supporting the gains here reflecting the cautious stance," said IG Market Strategist Jingyi Pan.
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Across the rest of the region, stock markets were mixed as investors awaited cues from Europe and the United States on further fiscal stimulus to counteract the effects of the
pandemic.
"Given the worsening pandemic conditions in the U.S. and the lead up to the elections, one suspects that the next stimulus package could be hastened to provide timely support, although
the size ... would be the question here," said IG Market Strategist Jingyi Pan.
Philippine stocks, which have been under pressure as virus cases continue to climb, recouped some recent losses and gained 0.5%.
