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Business Recorder
3 days ago
- Business
- Business Recorder
Asian currencies fall on Middle East jitters
BENGALURU: Most Asian currencies slipped on Wednesday as tensions between Israel and Iran remained in focus, while Indonesia's rupiah and stocks were little-changed after the central bank held rates steady, as expected. Bank Indonesia governor Perry Warjiyo said at a press conference that the central bank would continue to monitor for room to further support growth, while maintaining inflation within target and keeping the rupiah stable. The rupiah, which has appreciated 4% from the all-time low on April 9, was last marginally down 0.1% at 16,290 per dollar. Stocks fell 0.7%. 'Steady US rates and geopolitical risks might provide a brief respite to the greenback, limiting the room for further rupiah appreciation. After a temporary pause in June, we expect BI to stay on an easing path, with the door open for another 50bp cuts this year,' said Radhika Rao, senior economist at DBS. Other regional currencies were broadly weaker as the conflict between Iran and Israel entered a sixth day, with US President Donald Trump calling for Iran's unconditional surrender and warning US patience was wearing thin. The Israeli shekel was last marginally up at 3.5020 per dollar. It fell 0.4% on Tuesday. The MSCI index of emerging market currencies edged down 0.2%. The Malaysian ringgit and the Indian rupee inched 0.1% lower each against a wobbly dollar. The Philippine peso fell 1.2% to its lowest level in two months. The peso has performed well for most of this year, which is making it vulnerable as negative factors, including higher oil prices and concerns of a rate cut by the central bank, start weighing in, said Alan Lau, FX strategist at Maybank.
Economic Times
31-05-2025
- Business
- Economic Times
At 7.4%, India's growth steps on race pedal in Q4
India's economy surpassed expectations with a 7.4% growth in the March quarter, boosting FY25 growth to 6.5%. Investment recovery and strong construction drove this expansion, despite concerns about tepid urban demand and global uncertainties. While marking a four-year low, India remains the fastest-growing economy, poised to become the fourth largest, with economists projecting continued growth around 6.5%. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Urban Demand an Issue India's economy expanded faster than expected at a four-quarter high of 7.4% in the March quarter from a year earlier, lifting overall growth in FY25 to 6.5%, data released on Friday showed. The high growth belied concerns about a softer print amid risks from higher US tariffs, as a recovery in investment and a stronger construction sector propped up the ET poll conducted earlier this month had pegged growth at a median 6.8% for the quarter and 6.3% for risks to growth include tepid urban consumer demand , muted private investment demand and a volatile global environment. India has held its own in a 'growth-scarce' post-Covid global environment amid rising uncertainties due to political conflicts and trade tensions, said chief economic advisor V Anantha Nageswaran To be sure, the full-year gross domestic product (GDP) growth of 6.5% marks a four-year low. India's GDP had grown 9.2% in FY24. Despite the slowdown, India was the fastest-growing economy in the year and is on course to become the fourth largest later this year, overtaking nominal GDP growth rate was 9.8% in FY25 against a 12% rise in FY24, indicating a broadbased decline in inflation. The gross value added (GVA) grew 6.8% in the fourth quarter and 6.4% in economy had grown 6.4% in the December quarter and 8.4% in the year-earlier period. Gross fixed capital formation, an indicator of investment, rose 7.1% in FY25 and 9.4% in the March quarter. 'Real GDP was expected to fare strongly, partly due to a boost from net indirect taxes,' said Radhika Rao, senior economist at DBS Bank.'A catch-up in government spending, accompanied by betterperforming construction output, has lifted the headline figure,' Rao grew 5.4% in the fourth quarter, compared with 6.6% in Q3 and 0.9% a year ago. Manufacturing sector growth was 4.8% in the three months ended March, lower than 11.3% in Q4 of the previous year. Construction output surged 10.8% driven by high government capex. The 60 basis point gap between GDP and GVA in the fourth quarter was due to higher net indirect taxes, which rose 12.7%.However, private consumption growth eased to a five-quarter low of 6% while government final consumption expenditure contracted 1.8% in the fourth quarter after a gap of two quarters. 'The unevenness witnessed in the consumption recovery remains a critical monitorable going forward,' said Rajani Sinha, chief economist, CareEdge Ratings. 'The softness in urban demand continues to be an area of concern.'Economists said private sector participation in investment hanot yet taken off on a durable basis across sectors and, going ahead, India's FY26 GDP growth is estimated at 6-6.6%.US President's Donald Trump tariff threats also loom large. 'The reciprocal tariff is casting its shadow over global GDP and trade growth, which may force investors to postpone their investment decisions,' said Paras Jasrai, associate director, India Ratings and Research, adding that the investment outlook is still expects growth to stabilise around the 6.5% level at the start of FY26, supported by farm output, lower inflation and monetary easing, as well as continued public external uncertainties could have an impact through trade and investment channels. 'We believe that the Indian economy is poised to remain the fastest-growing major economy in FY26 (GDP growth expected at 6.3-6.5%) by leveraging its sound macroeconomic fundamentals, robust financial sector and commitment towards sustainable growth,' said Soumya Kanti Ghosh, group chief economic adviser, State Bank of India
Time of India
31-05-2025
- Business
- Time of India
At 7.4%, India's growth steps on race pedal in Q4
India's economy surpassed expectations with a 7.4% growth in the March quarter, boosting FY25 growth to 6.5%. Investment recovery and strong construction drove this expansion, despite concerns about tepid urban demand and global uncertainties. While marking a four-year low, India remains the fastest-growing economy, poised to become the fourth largest, with economists projecting continued growth around 6.5%. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Urban Demand an Issue India's economy expanded faster than expected at a four-quarter high of 7.4% in the March quarter from a year earlier, lifting overall growth in FY25 to 6.5%, data released on Friday showed. The high growth belied concerns about a softer print amid risks from higher US tariffs, as a recovery in investment and a stronger construction sector propped up the ET poll conducted earlier this month had pegged growth at a median 6.8% for the quarter and 6.3% for risks to growth include tepid urban consumer demand , muted private investment demand and a volatile global environment. India has held its own in a 'growth-scarce' post-Covid global environment amid rising uncertainties due to political conflicts and trade tensions, said chief economic advisor V Anantha Nageswaran To be sure, the full-year gross domestic product (GDP) growth of 6.5% marks a four-year low. India's GDP had grown 9.2% in FY24. Despite the slowdown, India was the fastest-growing economy in the year and is on course to become the fourth largest later this year, overtaking nominal GDP growth rate was 9.8% in FY25 against a 12% rise in FY24, indicating a broadbased decline in inflation. The gross value added (GVA) grew 6.8% in the fourth quarter and 6.4% in economy had grown 6.4% in the December quarter and 8.4% in the year-earlier period. Gross fixed capital formation, an indicator of investment, rose 7.1% in FY25 and 9.4% in the March quarter. 'Real GDP was expected to fare strongly, partly due to a boost from net indirect taxes,' said Radhika Rao, senior economist at DBS Bank.'A catch-up in government spending, accompanied by betterperforming construction output, has lifted the headline figure,' Rao grew 5.4% in the fourth quarter, compared with 6.6% in Q3 and 0.9% a year ago. Manufacturing sector growth was 4.8% in the three months ended March, lower than 11.3% in Q4 of the previous year. Construction output surged 10.8% driven by high government capex. The 60 basis point gap between GDP and GVA in the fourth quarter was due to higher net indirect taxes, which rose 12.7%.However, private consumption growth eased to a five-quarter low of 6% while government final consumption expenditure contracted 1.8% in the fourth quarter after a gap of two quarters. 'The unevenness witnessed in the consumption recovery remains a critical monitorable going forward,' said Rajani Sinha, chief economist, CareEdge Ratings. 'The softness in urban demand continues to be an area of concern.'Economists said private sector participation in investment hanot yet taken off on a durable basis across sectors and, going ahead, India's FY26 GDP growth is estimated at 6-6.6%.US President's Donald Trump tariff threats also loom large. 'The reciprocal tariff is casting its shadow over global GDP and trade growth, which may force investors to postpone their investment decisions,' said Paras Jasrai, associate director, India Ratings and Research, adding that the investment outlook is still expects growth to stabilise around the 6.5% level at the start of FY26, supported by farm output, lower inflation and monetary easing, as well as continued public external uncertainties could have an impact through trade and investment channels. 'We believe that the Indian economy is poised to remain the fastest-growing major economy in FY26 (GDP growth expected at 6.3-6.5%) by leveraging its sound macroeconomic fundamentals, robust financial sector and commitment towards sustainable growth,' said Soumya Kanti Ghosh, group chief economic adviser, State Bank of India
Mint
23-05-2025
- Business
- Mint
India-US Yield Gap at 20-Year Low Spurs Concern of Fund Outflows
(Bloomberg) -- Follow Bloomberg India on WhatsApp for exclusive content and analysis on what billionaires, businesses and markets are doing. Sign up here. India's bond yield premium over the US has narrowed to its smallest in two decades, likely risking fund outflows from local debt. The spread between the benchmark 10-year India debt and the US has shrunk to about 173 basis points, a level last seen in 2004, according to data compiled by Bloomberg. Indian bond yields have been declining, driven by the country's strong fiscal position, easing inflation, and expectations of lower interest rates, according to DBS Bank Ltd. This trend diverges from the US, where unfunded tax cuts have sparked fiscal concerns. The contrast has even led billionaire banker Uday Kotak to wonder whether Indian yields could eventually dip below those in the US. 'This compression is likely to hold given a favorable change in India's rates backdrop at this juncture, while investors' worries over US' fiscal strains are still to be addressed,' Radhika Rao, senior economist wrote in a note. Foreign funds have poured a net $2.3 billion in rupee debt so far this year, though the current quarter has seen about $4 billion of outflows. While a shrinking yield advantage is negative for emerging markets, India's strong macros may still ensure some inflows, traders say. 'Though the narrowing spread normally reduce the fund flow to Indian market, this time with sound fiscal position and less riskier currency dynamics we may still get flows in debt market,' said Gopal Tripathi, head of treasury and capital markets at Jana Small Finance Bank. Indian bonds are more integrated with global markets after the addition of local sovereign bonds to key emerging market indexes including those managed by JPMorgan Chase & Co. More stories like this are available on
Business Recorder
22-05-2025
- Business
- Business Recorder
Asia FX gain against soft dollar
BENGALURU: The Indonesian rupiah struggled for direction while shares in Jakarta extended gains after the central bank lowered interest rates on Wednesday, while currencies in emerging Asia traded higher against a weaker US dollar. Indonesia's currency, which was marginally higher ahead of the rate decision, was trading in a tight range. It was last 0.1% higher after having marginally eased. Stocks in the country extended gains to 1%. Bank Indonesia lowered its benchmark interest rate by a quarter point, as expected, after it stood pat on rates in April. The move came weeks after Indonesia reported slowest economic growth in three years and the rupiah strengthening over the past month. The central bank said it needs to further boost domestic growth to mitigate the impact of US tariffs and will keep intervening in the foreign exchange market to stabilise the rupiah. 'Rupiah stability coupled with signs of weaker growth momentum tilted the balance in favour of a 25bps rate cut,' said Radhika Rao, senior economist with DBS. 'We expect the BI to reinforce their pro-growth stance by tapping available window to lower rates.' Elsewhere, the South Korean won hovered rose after the government pledged support towards the domestic pharmaceuticals sector against US tariffs. Equities in Seoul gained up to 0.9%, led by pharmaceutical companies while battery makers staged a rebound as US President Donald Trump failed to receive backing for his tax bill. Among other currencies, the Singapore dollar, its Taiwanese counterpart and the Thai baht gained between 0.3% and 0.4%. 'Investors are closely monitoring any development with respect to economic and trade announcements, and will avoid taking major positions prior to them in order not to be caught on the wrong side in case of unexpected headlines,' said Massimiliano Bondurri, founder and CEO at SGMC Capital. The Malaysian ringgit was the top gainer among Asian currencies, rising 0.7%.
