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 percent 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 percent to 4.8 percent year-on-year for the second quarter, predicting a “U-shaped” recovery from the pandemic.
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. — Reuters
