* China cuts lending benchmark rate
* Indonesia will lift export ban on palm oil from Monday
* Risk sentiments improved on weaker dollar, fall in U.S.
yields
By Riya Sharma
May 20 (Reuters) - The Indonesian rupiah firmed on Friday
after the government said it would lift an export ban on palm
oil, while equities in Asia advanced after China cut a key
lending rate to support the slowing economy.
Equities in Seoul rose around 1.8%, on track to mark
the best week in two months, while those in India
advanced over 2%, set to mark their first weekly gain in six.
Indonesia, the world's top palm oil exporter, announced that
it will lift an export ban on palm oil from Monday after
imposing the policy on April 28. But it will impose a domestic
sales requirement for palm oil, to shore up local supplies of
cooking oil.
Palm oil comprises a third of the world's vegetable oil
market, with Indonesia accounting for about 60% of supply.
"Lifting of the ban is a definite positive for the rupiah as
it definitely was a factor that was weighing on the currency and
hurting the current account position of the country," said Mitul
Kotecha, senior EM strategist with TD Securities.
The rupiah, which had fallen nearly 1.6% since crude
palm oil shipments were halted, edged up 0.5% to lead gains
among Asian currencies, while shares in Jakarta advanced
as much as 2.1% to hit their highest in over a week.
Meanwhile, China cut its five-year loan prime rate (LPR),
which influences the pricing of mortgages, by a
bigger-than-expected margin of 15 basis points, as authorities
seek to cushion a sharp economic slowdown, though it left the
one-year LPR unchanged.
China's yuan eased but still looked set for its
biggest weekly gain in a year, snapping six straight weeks of
losses, reflecting broad dollar weakness in global markets.
Risk sentiment improved across Asian markets on hopes that
China was set to launch more stimulus, and as the U.S. dollar
and yields fell. The dollar's appeal as a haven was eclipsed by
a decline in U.S. yields as investors rushed for the safety of
Treasury bonds.
Mirroring the shift in risk appetite in equities, currencies
in the region also advanced with the South Korean won
and the Indian rupee heading gains, advancing 0.5% and
0.3%, repectively.
However, worries continued to grow that the Fed and other
central banks have fallen behind the curve in stemming inflation
and may have to tighten policy even more aggressively in coming
months.
HIGHLIGHTS:
** Indonesia posted a $221 million current account surplus in
the first quarter or 0.1% of gross domestic product (GDP),
smaller than the 0.5% of GDP surplus it recorded in the previous
quarter, the central bank said in a statement on Friday.
** Top gainers on FTSE Bursa Malaysia Kl Index include
Press Metal Aluminium Holdings Bhd up 2.56% and Axiata
Group Bhd up 2.52%
Asia stock indexes and
currencies at 0456 GMT
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
%
Japan +0.03 -9.92 <.N2 1.13 -7.25
25>
China <CNY=CFXS -0.14 -5.43 <.SS 1.11 -13.97
> EC>
India +0.26 -4.12 <.NS 2.23 -6.87
EI>
Indonesi +0.44 -2.83 <.JK 1.75 5.48
a SE>
Malaysia +0.19 -5.23 <.KL 0.12 -1.04
SE>
Philippi +0.04 -2.37 <.PS 1.31 -5.27
nes I>
S.Korea <KRW=KFTC +0.54 -6.45 <.KS 1.86 -11.32
> 11>
Singapor +0.09 -2.21 <.ST 1.28 3.46
e I>
Taiwan +0.32 -6.68 <.TW 0.85 -11.32
II>
Thailand -0.15 -3.13 <.SE 0.89 -2.25
TI>
(Reporting by Riya Sharma in Bengaluru; Editing by Kim Coghill)
Our Standards: The Thomson Reuters Trust Principles.