MYR (4.321) ▲

▪ Malaysia’s RM250.0b economic stimulus package coupled with Bank Negara Malaysia (BNM) policy response to COVID- 19 has helped to support the local currency. Furthermore, ringgit had strengthened against a weakening US dollar after US announced a massive stimulus package.

▪ MYR is expected to hover around 4.2-4.3 on continuous weakening of dollar, Malaysia’s fiscal and monetary measures to cushion the impact of COVID-19 pandemic.

IDR (16,310) ▲

▪ The COVID-19 pandemic triggers massive Indonesian asset selloff with foreign investors dumping government bonds and stocks, dragging IDR to its weakest level since the 1998 crisis. Meanwhile, Bank Indonesia intervenes in spot, and nondeliverable forward markets help stabilise the IDR.

▪ IDR to remain volatile as Indonesian assets often perceived as a risk barometer due to its attractive high yield, while escalating pandemic adds downside pressure to the currency.

THB (32.793) ▼

▪ An emergency cut in policy rate to a fresh record-low of 0.75% and release of weak domestic economic indicators (e.g. exports, inflation) outweighed support from the announcement of two stimulus packages worth a total of THB517.0b.

▪ THB to remain pressured on expectation of a more severe spread of COVID-19, following the declaration of a 1-month state of emergency, though its impact may be partially cushioned by injection of additional stimulus between April and July.

CNY (7.083) ▼

▪ Targeted RRR cuts, slash in 7-day reverse repo rate and the release of a slew of negative January-February economic indicators offset upside bias from the tapering of COVID-19 infections.

▪ Downward bias to remain, as more aggressive easing is expected this month, in line with the pledge made by the Politburo, China’s top decision-making body, in an effort to avert deeper economic damages from the pandemic.

JPY (108.620) ▲

▪ JPY gained in tandem with its status as a safe-haven currency, and the government prepares for the boldest-ever stimulus package. Meanwhile, the Bank of Japan reiterated its stance to relax some capital and liquidity requirements.

▪ Conditions are likely to remain volatile on concerns over the country’s prospect of recession and the impact of a delayed Tokyo Olympics on the economy.

Source: Kenanga Research - 1 Apr 2020