The moves followed Iran’s attacks on a major LNG site in Qatar, one of several energy assets it pledged to target following strikes on the Islamic Republic’s giant South Pars gas field. The worsening war situation is raising concerns around inflation, hitting investor sentiment globally.
“EM assets remain under pressure as the war in Iran continues,” Goldman Sachs strategists including Kamakshya Trivedi wrote in a note, adding “as the conflict has extended, fundamental factors such as terms of trade and earnings sensitivities have started to play a larger role.”
Philippine peso fell past the record low 60-per-dollar level after Bangko Sentral ng Pilipinas (BSP) on Wednesday signalled that its FX intervention would be only to temper large swings, instead of defending a current level. This comes after BSP said on Monday that it had intervened earlier as the currency approached that key level.
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Bank Indonesia also said that it will keep stabilising the rupiah in offshore markets, even as onshore markets have been closed since Wednesday due to the Eid al-Fitr holiday, and will only reopen next Wednesday.
Meanwhile, Moody’s Ratings raised Bolivia’s rating to Caa3 from Ca with a positive outlook, following a pledge by the government it will be able to meet dollar bond coupon payments this month.
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