TAPEI — The rupee and rupiah led a third weekly advance in Asian currencies on speculation political developments in the two nations will spur investment.
The rupee had the biggest weekly gain since September after results showed the main opposition Bharatiya Janata Party and its allies won or were leading in about 340 of 543 seats up for grabs, more than the 272 needed for a majority, while Rahul Gandhi, who led the ruling Congress party campaign, conceded defeat. In Indonesia, presidential frontrunner Joko Widodo garnered more support from other parties.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, climbed 0.29% from May 9 to 116.08 in Hong Kong. The rupee rose 2.1% this week to 58.78 per dollar and touched an 11-month high of 58.62 on Friday. The rupiah appreciated 1% to 11,415 in the biggest five-day rally since March. The S&P BSE Sensex of Indian shares jumped to a record on Friday.
“Counting shows the BJP is poised for a majority win, which has boosted the rupee,” said Manis Thanawala, a director at Greenback Forex Services Pvt in Mumbai. “The sharp surge in local stock indices is also a positive for the rupee.”
Global funds bought $981 million more Indian bonds and stocks than they sold in the first two days of this week, exchange data show. Gains in the rupee were capped on May 15 on speculation the Reserve Bank of India bought dollars, according to three traders who asked not to be identified.
Indonesian polls
India’s wholesale-price inflation was 5.2% in April, compared with 5.7% in March, official data showed this week. The consumer-price index climbed to 8.59% from 8.31% in March, according to a May 12 report.
In Indonesia, Widodo’s Indonesian Democratic Party of Struggle, or PDI-P, won the largest share of votes in an April 9 parliamentary poll and formed a three-party coalition this week before the presidential election on July 9. Former Vice President Jusuf Kalla from the Golkar party is among those being considered to be Widodo’s running mate, Puan Maharani, a PDI-P official, said in Jakarta on Wednesday.
“It looks like, if Golkar does formally join, there will be a four-party coalition that commands more than half of the parliamentary seats,” said Wellian Wiranto, an economist in Singapore at Oversea-Chinese Banking Corp. “That’s obviously a majority that will help ease political bickering.”
China’s yuan slipped 0.09% this week to 6.2334 per dollar as data showed growth in industrial output and retail sales slowed in April. Malaysia’s ringgit halted two weeks of appreciation, declining 0.2% from May 9 to 3.2335, amid concern slower expansion in China would hurt regional growth.
Elsewhere in Asia, Thailand’s baht snapped a three-week drop, rising 0.4% to 32.5 per dollar. The Philippine peso fell 0.2% to 43.760 and Taiwan’s dollar slipped 0.1% to NT$30.208. South Korea’s won was little changed at 1,024.16, while Vietnam’s dong lost 0.3% to 21,165.